Federal Bank posts record ₹1,386 crore quarterly profit, NPA hits decade low

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Net Interest Income rose 26.38% year-on-year to ₹3,153.40 crore, outpacing advances growth of 21.66%

By Anupama Ghosh

Updated - October 17, 2026 at 09:23 AM.

Federal Bank on Friday reported its highest-ever quarterly net profit of ₹1,386.09 crore for the July–September 2026 quarter (Q2 FY27), a jump of 45.10 per cent over the same period last year. The Kerala-based private lender also reported gross and net non-performing asset ratios at their lowest levels in a decade, triggering a 2.10 per cent rally in its NSE-listed shares to ₹342.05.

Net Interest Income rose 26.38 per cent year-on-year to ₹3,153.40 crore, outpacing advances growth of 21.66 per cent. The bank’s net interest margin widened 26 basis points to 3.32 per cent, while cost of deposits fell 39 basis points to 5.18 per cent.

Fee income climbed 31.86 per cent to ₹1,167.71 crore, reaching an all-time high as a proportion of average earning assets at 1.11 per cent. Total other income hit a record ₹1,490.44 crore, up 37.73 per cent year-on-year, aided by a sharp surge in treasury income.

On asset quality, Gross NPA declined to 1.32 per cent from 1.83 per cent a year ago, and Net NPA fell to 0.17 per cent from 0.48 per cent. The Provision Coverage Ratio, excluding technical write-offs, improved 1,333 basis points year-on-year to 86.78 per cent. Fresh slippages dropped 27.48 per cent year-on-year.

Total deposits stood at ₹3,42,694 crore, up 18.61 per cent, while gross advances crossed ₹3 lakh crore at ₹3,01,688 crore. CASA balances grew 22.56 per cent to ₹1,09,803 crore, with the CASA ratio at 32.04 per cent. The bank’s total business franchise exceeded ₹6.4 lakh crore, growing 20.12 per cent year-on-year.

Return on assets improved to 1.32 per cent and return on equity to 13.57 per cent. The cost-to-income ratio tightened to 52.08 per cent from 54.04 per cent a year earlier. Capital adequacy stood at 16.84 per cent.

MD & CEO KVS Manian said growth is being driven by the core franchise, with fee income relative to earning assets at an all-time high. The bank added 12 branches during the quarter, taking its network to 1,662 outlets.

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Published on October 16, 2026

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