Federal Bank has reported 10% decline in net profit at Rs 955.26 crore for the quarter ended September 2025 (Q2FY2026). The bank has posted 5% growth in net interest income (NII), while the core fee income of the bank also improved 11% in Q2FY2026. The Net Interest Margin (NIM) of the bank improved to 3.06% in Q2FY2026 from 2.94% in Q1FY2026, while eased from 3.12% in the corresponding quarter of previous year.
On business front, the bank as has posted 6% growth in business with 5% increase in loan book. The asset quality of the bank has improved in Q2FY2026. Bank has reduced the credit to deposit ratio to 84.7% at end September 2025 from 86.9% at end September 2024. CASA ratio of the bank has improved to 31.0% at end September 2025 from 30.1% at end September 2024.
Asset quality improves: The bank has improved asset quality in Q2FY2026.
The fresh slippages of loans stood at Rs 584 crore in Q2FY2026 compared with Rs 661 crore in previous quarter and Rs 434 crore in the corresponding quarter last year. The recoveries and upgradations of NPAs stood at Rs 265 crore, while the write-off of loans was at Rs 457 crore in Q2FY2026. The standard restructured loan book of the bank declined to Rs 1208 crore end September 2025. Provision coverage ratio was steady at 73.45% at end September 2025 compared to 74.41% a quarter ago and 71.82% a year ago. The capital adequacy ratio of the bank stood at 15.7% with Tier I ratio at 14.4% at end September 2025. The risk weighted assets of the bank has increased 9% YoY to Rs 216116 crore end September 2025. '
| Asset Quality Indicators: Federal Bank |
| ' | Sep-25 | Jun-25 | Mar-25 | Dec-24 | Sep-24 | Variation | ' |
| QoQ | YTD | YoY | ' |
| Gross NPA (Rs Crore) | 4532.01 | 4669.66 | 4375.54 | 4553.31 | 4884.49 | -3 | 4 | -7 | ' |
| Net NPA (Rs Crore) | 1165.16 | 1157.64 | 1040.38 | 1131.17 | 1322.29 | 1 | 12 | -12 | ' |
| % Gross NPA | 1.83 | 1.91 | 1.84 | 1.95 | 2.09 | -8 | -1 | -26 | ' |
| % Net NPA | 0.48 | 0.48 | 0.44 | 0.49 | 0.57 | 0 | 4 | -9 | ' |
| % PCR | 73.45 | 74.41 | 75.37 | 74.21 | 71.82 | -96 | -192 | 163 | ' |
| % CRAR - Basel III | 15.71 | 16.03 | 16.40 | 15.16 | 15.20 | -32 | -69 | 51 | ' |
| % CRAR - Tier I - Basel III | 14.37 | 14.69 | 15.04 | 13.78 | 13.82 | -32 | -67 | 55 | ' |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
|
|
|
|
|
|
|
|
|
|
|
'
Business Highlights:
Business growth moderates: The business of the bank has increased at slower pace of 6% YoY to Rs 533599 crore end September 2025 compared with 9% growth at end June 2025. Advances rose at moderated pace of 5% to Rs 244679 crore. Deposits growth eased slightly to 7% at Rs 288920 crore at end September 2025.
CASA deposits ratio improves: The CASA deposits of the bank increased 11% YoY to Rs 89591 crore at end September 2025. The current account deposits increased 11% to Rs 19274 crore, while saving account deposits also improved 11% to Rs 67962 crore end September 2025. The CASA ratio galloped to 31.0% at end September 2025 compared to 30.1% at end September 2024. The term deposits have increased 6% to Rs 199329 crore end September 2025. The NRE deposits moved up 11% to Rs 89591 crore end September 2025.
Moderate loan growth: Advances growth was driven by retail loans rising 3% YoY to Rs 105183 crore at end September 2025, while credit to agriculture increased 4% to Rs 8349 crore and MSME 7% to Rs 24680 crore at end September 2025. The corporate credit has increased 9% to Rs 117401 crore end September 2025.
Investment book of the bank increased 9% YoY to Rs 70347 crore at end September 2025.
Margins rises qoq, declines yoy: The bank has exhibited 29 bps YoY decline in cost of deposits to 5.57%, while yield on advances also dipped 49 bps YoY to 8.86% in Q2FY2026. Thus, the NIM has declined 6 bps YoY to 3.06%., while rose 12 bps qoq to 3.06% in Q2FY2026.
Branch expansion: The bank has added 4 branches and reduced 12 ATMs in Q2FY2026, taking overall tally to 1595 branches and 2082 ATM`s end September 2025.
Book value of the bank stood at Rs 142.6 per share at end September 2025, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 137.4 per share at end September 2025.
Quarterly Performance
NII rises as NIM improves on sequential basis: Bank has recorded 3% increase in the interest earned at Rs 6742.16 crore, while interest expenses rose 1% to Rs 4246.92 crore in Q2FY2026. NII improved 5% to Rs 2495.24 crore in the quarter ended September 2025.
Healthy growth in the core fee income: Bank has posted strong 11% growth in core fee income to Rs 804 crore, while the forex income jumped 41% to Rs 82 crore. However, the treasury income declined 23% to Rs 113 crore. The overall non-interest income increased 12% to Rs 1082.17 crore in the quarter ended September 2025.
Expenses ratio rises: The operating expenses of the bank increased 9% to Rs 1933.24 crore, as other expenses moved up 15% to Rs 1129.8 crore, while employee expenses increased 3% to Rs 803.44 crore in Q2FY2026. Cost to income ratio rose to 54.0% in Q2FY2026 compared with 53.0% in Q2FY2025, allowing the Operating Profit to increase 5% to Rs 1644.17 crore.
Provisions and contingencies jump: The bank has shown 129% surge in provisions to Rs 363 crore. The loan loss provisions jumped 82% to Rs 306 crore, while standard asset provisions galloped 336% to Rs 48 crore and other provisions rebounded to Rs 9 crore.
Effective tax rate rose to 25.4% in Q2FY2026 from 24.9% in Q2FY2025. Net Profit declined 10% YoY to Rs 955.26 crore during quarter ended September 2025.
Financial Performance H1FY2026:
Bank has posted 12% decline in net profit to Rs 1817.01 crore in the half year ended September 2025 (H1FY2026). The net interest income rose 4% to Rs 4832.07 crore, while non-interest income moved up 17% to Rs 2195.15 crore, pushing up net total income by 7% to Rs 7027.22 crore in H1FY2026. The operating expenses increased 10% to Rs 3826.76 crore, while provision and contingencies galloped 152% to Rs 763.25 crore, causing profit before tax to decline 12% to Rs 2437.21 crore in H1FY2026. The cost-to-income ratio rose to 54.5% in H1FY2026 compared to 53.1% in H1FY2025. An effective tax rate rose slightly to 25.4% in H1FY2026 compared to 25.2% in H1FY2025. The net profit has fell 12% to Rs 1817.01 crore in H1FY2026. '
| Federal Bank: Results |
| Particulars | 2509 (3) | 2409 (3) | Var % | 2509 (6) | 2409 (6) | Var % | 2503 (12) | 2403 (12) | Var % |
| Interest Earned | 6742.16 | 6577.28 | 3 | 13428.79 | 12908.16 | 4 | 26365.25 | 22188.26 | 19 |
| Interest Expended | 4246.92 | 4210.05 | 1 | 8596.72 | 8248.95 | 4 | 16897.26 | 13894.78 | 22 |
| Net Interest Income | 2495.24 | 2367.23 | 5 | 4832.07 | 4659.21 | 4 | 9467.99 | 8293.48 | 14 |
| Other Income | 1082.17 | 963.95 | 12 | 2195.15 | 1879.13 | 17 | 3801.25 | 3079.27 | 23 |
| Net Total Income | 3577.41 | 3331.18 | 7 | 7027.22 | 6538.34 | 7 | 13269.24 | 11372.75 | 17 |
| Operating Expenses | 1933.24 | 1765.82 | 9 | 3826.76 | 3472.07 | 10 | 7168.11 | 6198.27 | 16 |
| Operating Profits | 1644.17 | 1565.36 | 5 | 3200.46 | 3066.27 | 4 | 6101.13 | 5174.48 | 18 |
| Provisions & Contingencies | 363.09 | 158.35 | 129 | 763.25 | 302.62 | 152 | 733.06 | 196.10 | 274 |
| Profit Before Tax | 1281.08 | 1407.01 | -9 | 2437.21 | 2763.65 | -12 | 5368.07 | 4978.38 | 8 |
| EO | 0.00 | 0.00 | - | 0.00 | 0.00 | - | 0.00 | 0.00 | - |
| PBT after EO | 1281.08 | 1407.01 | -9 | 2437.21 | 2763.65 | -12 | 5368.07 | 4978.38 | 8 |
| Provision for tax | 325.82 | 350.32 | -7 | 620.20 | 697.43 | -11 | 1316.18 | 1257.78 | 5 |
| PAT | 955.26 | 1056.69 | -10 | 1817.01 | 2066.22 | -12 | 4051.89 | 3720.60 | 9 |
| EPS*(Rs) | 15.5 | 17.2 | ' | 29.6 | 16.8 | ' | 16.5 | 15.3 | ' |
| Equity | 491.6 | 490.5 | ' | 491.6 | 490.5 | ' | 491.2 | 487.2 | ' |
| Adj BV (Rs) | 137.4 | 122.2 | ' | 137.4 | 122.2 | ' | 131.3 | 113.4 | ' |
| * EPS and Adj BV are calculated on diluted equity as given for each year. Face Value: Rs 2, Figures in Rs crore |
| Source: Capitaline Corporate Database |
Powered by Capital Market - Live News