Federal Bank Ltd has reported a 9.6 per cent year-on-year decline in standalone net profit to Rs 955.3 crore for the July–September quarter (Q2 FY26), even as its net interest income (NII) rose 5.4 per cent on-year to a record Rs 2,495 crore, supported by stable margins and steady loan growth. On a sequential basis, the bank’s net profit increased 10.85 per cent.
The bank’s asset quality improved further during the fiscal second quarter, with gross non-performing assets (GNPA) easing to 1.83 per cent from 2.09 per cent a year ago. Net NPA stood at 0.48 per cent compared with 0.57 per cent in the same period last year.
Fee income also reached an all-time high of Rs 886 crore, rising 13 per cent year-on-year, reflecting continued strength in non-interest revenue. Operating profit rose 5 per cent to Rs 1,644 crore, while the return on assets (ROA) stood at 1.09 per cent and return on equity (ROE) at 11.01 per cent.
Federal Bank’s total deposits increased 7.4 per cent year-on-year to Rs 2.89 lakh crore as of 30 September 2025, while net advances grew 6.2 per cent to Rs 2.45 lakh crore. The current account savings account (CASA) ratio improved 94 basis points to 31.01 per cent, with CASA deposits rising 10.7 per cent to Rs 89,591 crore.
Total income for the quarter grew 3.8 per cent year-on-year to Rs 7,824.3 crore. The provision coverage ratio remained at 73.45 per cent, while the capital adequacy ratio (CRAR) stood at 15.71 per cent, up from 15.20 per cent a year earlier. Net worth increased nearly 12 per cent year-on-year to Rs 34,820 crore.
Managing Director and Chief Executive K. V. S. Manian said the bank’s strategic reorientation and disciplined growth focus were beginning to show results. He noted that the CASA franchise continued to demonstrate sustained and meaningful growth, reflecting customer trust and consistent execution, as the bank broadened its asset mix and strengthened its foundation for the future.
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