Financial Performance Overview

Federal Bank reported unaudited financial results for Q2 FY27 (quarter ended September 30, 2026) showing record profitability and strong business growth.

Profitability Metrics

  • Net Profit: ₹1,386.09 crore, up 45.10% YoY and 17.77% QoQ (highest quarterly profit in Bank's history)
  • Earnings Per Share: ₹22.26, up 44.34% YoY
  • Operating Profit: ₹2,225.37 crore, up 35.35% YoY
  • Return on Assets (RoA): 1.32%, improved 23 bps YoY
  • Return on Equity (RoE): 13.57%, expanded 256 bps YoY
  • Book Value Per Share: ₹166.32, up 17.48% YoY

Core Earnings Drivers

  • Net Interest Income (NII): ₹3,153.40 crore, up 26.38% YoY
  • Net Interest Margin (NIM): 3.32%, expanded 26 bps YoY
  • Cost of Funds: Fell 40 bps YoY
  • Cost of Deposits: 5.18%, declined 39 bps YoY
  • Other Income: ₹1,490.44 crore (highest ever), up 37.73% YoY
  • Fee Income: ₹1,167.71 crore, up 31.86% YoY
  • Fee Income to Average Earning Assets: 1.11% (all-time high)

Asset Quality & Provisions

  • Gross NPA: 1.32% (decadal low), improved 51 bps YoY
  • Net NPA: 0.17% (decadal low), improved 31 bps YoY
  • Provision Coverage Ratio (excluding TWO): 86.78%, up 1,333 bps YoY
  • Provision Coverage Ratio (including technical write-offs): 94.49%
  • Credit Cost: 0.31%, declined 19 bps YoY
  • Fresh Slippages: Declined 27.48% YoY
  • Slippage Ratio: 0.59% (improved from 0.94% a year ago)
  • Restructured Book: ₹1,389.55 crore (0.46% of gross advances)

Balance Sheet Strength

  • Total Business: Over ₹6.4 lakh crore, up 20.12% YoY
  • Total Deposits: ₹3,42,693.56 crore, up 18.61% YoY
  • Gross Advances: ₹3,01,687.80 crore (crossed ₹3 lakh crore), up 21.66% YoY
  • CASA Balances: ₹1,09,803.15 crore, up 22.56% YoY
  • CASA Ratio: 32.04%, improved 103 bps YoY
  • Average CASA: Crossed ₹1 lakh crore
  • NR Deposits (NRE and ONR): ₹1,19,055.98 crore, up 26.63% YoY
  • FCNR(B) Deposits: ₹23,547.72 crore, up 239.14% YoY

Segment Performance

  • Gold Loans: Grew 37.13% YoY
  • LAP (Loan Against Property): Grew 32.21% YoY
  • Credit Cards: Grew 28.27% YoY
  • Commercial Banking: Grew 25.46% YoY
  • CV/CE (Commercial Vehicle/Construction Equipment): Grew 21.74% YoY
  • Corporate & Institutional Banking: ₹1,04,666.02 crore, up 17.19% YoY
  • Business Banking: Returned to growth at 12.39% YoY

Operational Efficiency

  • Cost-to-Income Ratio: 52.08%, improved 196 bps YoY

Capital Position

  • CRAR: 16.84%, up 113 bps YoY
  • Tier I Capital: 15.76%, up 139 bps YoY

Network Expansion

  • Branches Added: 12 during the quarter
  • Total Banking Outlets: 1,662

Management Commentary

Mr. KVS Manian, Managing Director & CEO, highlighted several milestones: highest-ever profit, total business franchise over ₹6.4 lakh crore, and advances crossing ₹3 lakh crore. He noted that growth is coming from the core with NII growing 26% and fee income growing 32%. Asset quality improvements were emphasized with gross and net NPA at lowest levels in a decade, slippages down 27%, and provision coverage at 87%. The CEO stated that chosen segments are delivering as intended, and the CASA and NR franchises continue to deepen. The Bank enters the second half with a strong capital position, granular balance sheet, and good momentum in core business.

Additional Information

The results were submitted pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Detailed investor presentation is available on the Bank's website at https://www.federal.bank.in/financial-result.