Federal Bank has announced a significant financial performance for the quarter ending 31 March 2026, reporting a net profit of ₹1,259.10 crore. This marks a sequential growth of 20.93%, driven by stronger core earnings. For the financial year, the bank’s net profit stands at ₹4,117.32 crore.
The bank has successfully optimised its funding profile by focusing on retail liabilities and reducing high-value deposits, which has lowered the overall cost of funds to 5.46%. Notably, the non-resident (NR) deposit book crossed the ₹1 lakh crore milestone, reaching ₹1,02,619.69 crore, a 7.04% increase quarter-on-quarter (QoQ).
The current account savings account (CASA) ratio improved significantly, reaching 32.94%, up 271 basis points year-on-year (YoY). The bank’s asset mix strategy yielded positive results, with commercial banking growing by 5.92% QoQ and retail banking by 3.21% QoQ.
Fee income also saw a substantial increase, reaching ₹990.92 crore, up 10.54% QoQ. In terms of asset quality, the gross non-performing assets (GNPA) and net non-performing assets (NNPA) hit record lows of 1.62% and 0.20% respectively.
Return on assets (RoA) was reported at 1.36%, and net interest margin (NIM) reached 3.74%, while return on equity (RoE) expanded to 13.69%. The bank introduced a new wealth management service, marking a significant expansion in its offerings.
Total business for the bank reached ₹5,78,503.76 crore, registering a 4.54% QoQ growth. Gross advances increased to ₹2,68,369.03 crore, up 3.65% QoQ, driven by growth in commercial banking, retail, and the commercial vehicle/construction equipment (CV/CE) segments.
Total deposits rose to ₹3,13,909.39 crore, up 5.41% QoQ, with significant contributions from both resident and NR deposits. CASA balances grew to ₹1,03,390.30 crore, marking an 8.26% QoQ increase, also crossing the ₹1 lakh crore milestone.
The bank’s cost-to-income ratio improved to 47.28%, a sequential reduction of 665 basis points, reflecting strong operating leverage. The provision coverage ratio, excluding technical write-offs, improved to 87.07%, up 1,193 basis points sequentially.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).