Federal Bank Q2 net profit rises 10.85% QoQ; record-high NII, asset quality remains strong

Federal Bank

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26 Aug, 2025 12:21

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Federal Bank Ltd reported a 9.6 percent 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 percent on-year to a record Rs 2,495 crore, supported by stable margins and steady loan growth.

On sequential basis, net profit of the bank rose 10.85 percent.

Federal Bank’s asset quality improved further during the quarter, with gross non-performing assets (GNPA) easing to 1.83 percent from 2.09 percent a year ago, and net NPA at 0.48 percent versus 0.57 percent.

Fee income also touched an all-time high of Rs 886 crore, rising 13 percent year-on-year, reflecting continued strength in non-interest revenue. Operating profit increased 5 percent to Rs 1,644 crore, while the return on assets (ROA) stood at 1.09 percent and return on equity (ROE) at 11.01 percent.

Federal Bank’s total deposits rose 7.4 percent YoY to Rs 2.89 lakh crore as of September 30, 2025, and net advances increased 6.2 percent to Rs 2.45 lakh crore. The current account savings account (CASA) ratio improved 94 basis points to 31.01 percent, with CASA deposits up 10.7 percent to Rs 89,591 crore.

Total income during the quarter grew 3.8 percent on-year to Rs 7,824.3 crore. The provision coverage ratio remained strong at 73.45 percent, and the capital adequacy ratio (CRAR) stood at 15.71 percent, up from 15.20 percent a year earlier. Net worth rose nearly 12 percent year-on-year to Rs 34,820 crore.

Managing Director and CEO K.V.S. Manian said the bank’s strategic reorientation and disciplined growth focus were beginning to show results. “Our CASA franchise continues to demonstrate sustained and meaningful growth, reflecting customer trust and consistent execution. We’re broadening our asset mix thoughtfully and strengthening our foundation for the future,” he said in a statement.