Fedbank Financial Services Limited has informed the Exchange about Transcript
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Fedbank Financial Services reported Q1 FY26 AUM of INR15,697 crores, up 19% year-on-year, driven by strong gold loan growth of 39% YoY to INR6,332 crores and mortgage AUM growth of 29.7% YoY to INR8,539 crores. Net profit rose 6.8% YoY to INR75 crores, while operating profit dipped 0.5% YoY to INR128.2 crores due to a deliberate reduction in direct assignment (DA) income. The company completed 100% assignment (sell-down) of its INR770 crores unsecured business loan portfolio and raised a maiden $100 million external commercial borrowing (ECB), boosting capital adequacy from 21.9% to 22.4% and lowering the debt-equity ratio from 4.03 to 3.89. Credit cost for the quarter came in at 0.8%, with management reiterating FY26 guidance of 1% plus or minus 10 bps. Management plans to open 100-150 new gold branches in FY26 and has co-located 23 branches to drive synergies between gold and small-ticket LAP businesses.
Positive: Secured portfolio rebalancing is nearly complete, capital position has strengthened, and gold loan momentum is strong. Negative near-term: One-time 37 bps yield hit from the business loan assignment weighed on NIMs this quarter, and operating profit was flat as DA income was deliberately reduced. Shareholders should watch for ST LAP business revival in coming quarters and the impact of new branch expansion on cost-to-income ratios.