Shares of Federal Bank surged over 7% in Friday’s session, January 16, after the private lender reported a strong set of December-quarter earnings, beating Street expectations on both profit and asset quality parameters. The stock was trading around Rs 264.50 on the NSE, up nearly 7.15% from its previous close, as investors reacted positively to the Q3 performance.
For the third quarter, Federal Bank reported a standalone net profit of Rs 1,041 crore, marking a 9% year-on-year growth compared to Rs 955 crore in the corresponding quarter last year. The profit figure came in above CNBC-TV18 poll estimates of around Rs 1,000 crore, providing a clear earnings surprise.
Net Interest Income for the quarter stood at Rs 2,652.73 crore, up 9.10% year-on-year from Rs 2,431.34 crore in Q3 of the previous financial year. The improvement in NII reflects steady loan growth and stable margins during the quarter.
On the asset quality front, the bank reported further improvement. Gross non-performing assets declined to 1.72% in Q3 from 1.83% in the September quarter, while net NPAs eased to 0.42% from 0.48% on a sequential basis, indicating better credit discipline and controlled slippages.
Total interest earned during the quarter rose to Rs 6,875 crore, compared to Rs 6,809 crore in the year-ago period, supporting overall income growth. Operating profit also remained healthy, aided by controlled operating expenses and lower provisions.
Following the results, Federal Bank emerged as one of the top gainers among banking stocks, with strong buying interest seen across intraday trades as investors priced in improving profitability and stable asset quality.
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