Federal Bank Q2 profit jumps 45% to record ₹1,386 crore

Federal Bank posted a record net profit of ₹1,386 crore for the September quarter, up 45% year-on-year (YoY), driven by improved asset quality and a record increase in other income.

The bank’s gross non-performing asset (NPA) ratio fell to a decade low of 1.32% at the end of Q2FY27, from 1.52% in the preceding quarter. Net NPA declined to 0.17% from 0.18%.

The provision coverage ratio rose 1,333 basis points YoY to 86.78%, while fresh slippages declined 27.48% over the same period.

Interest income was up 15% YoY to ₹7,721 crore, while other income surged nearly 38% to a record ₹1,490 crore.

Net advances grew 22% YoY to ₹2.49 lakh crore, while total deposits rose 16% to ₹2.49 lakh crore. The bank’s net interest margin (NIM) edged down to 3.32% from 3.33% in the preceding quarter.

Current account and savings account (CASA) balances increased 26.63% YoY to ₹1.09 lakh crore, taking the CASA ratio to 32.04%, up 103 basis points.

Speaking at a post-earnings media call, managing director and chief executive officer K. V. S. Maniyan said the bank was exploring investment opportunities across financial services, including core and universal banking.

He cautioned that the agricultural segment warranted close monitoring amid the threat of El Niño, though the bank had not yet recorded any significant impact on slippages.