States » SouthPosted at: Oct 16 2026 4:16PM


Federal Bank Q2 profit surges 45 pc to record Rs 1,386 crore; NPAs hit decade lows

Kochi, Oct 16 (UNI) Federal Bank has reported its highest-ever quarterly net profit of ₹1,386.09 crore for the second quarter ended September 30, 2026, registering a 45.10 per cent increase year-on-year, supported by strong core earnings, improved margins and better asset quality.
The bank’s total business crossed ₹6.4 lakh crore, up 20.12 per cent from a year ago, while gross advances surpassed ₹3 lakh crore to reach ₹3,01,687.80 crore, marking a 21.66 per cent growth. Total deposits rose 18.61 per cent to ₹3,42,693.56 crore.
Net interest income (NII), the difference between interest earned and interest paid, increased 26.38 per cent to ₹3,153.40 crore. Other income climbed 37.73 per cent to a record ₹1,490.44 crore, with fee income rising 31.86 per cent to an all-time high of ₹1,167.71 crore.
Operating profit grew 35.35 per cent to ₹2,225.37 crore, while net profit increased 17.77 per cent sequentially. Earnings per share rose 44.34 per cent to ₹22.26.
The bank’s asset quality improved to its best levels in a decade, with gross non-performing assets (NPA) declining to 1.32 per cent and net NPA to 0.17 per cent. The respective ratios improved by 51 basis points and 31 basis points year-on-year.
Fresh slippages declined 27.48 per cent, while the slippage ratio improved to 0.59 per cent from 0.94 per cent a year earlier. The provision coverage ratio, excluding technical write-offs, strengthened to 86.78 per cent, while coverage including technical write-offs stood at 94.49 per cent. Credit cost declined to 0.31 per cent.
The net interest margin expanded 26 basis points year-on-year to 3.32 per cent. The cost of funds fell 40 basis points, while the cost of deposits declined 39 basis points to 5.18 per cent.
The bank’s current account and savings account (CASA) deposits rose 22.56 per cent to ₹1,09,803.15 crore, taking the CASA ratio to 32.04 per cent, an improvement of 103 basis points. Non-resident deposits increased 26.63 per cent to ₹1,19,055.98 crore, while FCNR(B) deposits surged 239.14 per cent to ₹23,547.72 crore.
Among key business segments, gold loans grew 37.13 per cent, loans against property 32.21 per cent and credit cards 28.27 per cent. Commercial banking expanded 25.46 per cent, while commercial vehicle and construction equipment financing grew 21.74 per cent.
Corporate and institutional banking advances increased 17.19 per cent to ₹1,04,666.02 crore, while business banking returned to growth with a 12.39 per cent increase.
The cost-to-income ratio improved by 196 basis points to 52.08 per cent. Return on assets rose to 1.32 per cent and return on equity to 13.57 per cent. Book value per share increased 17.48 per cent to ₹166.32.
The bank’s capital adequacy ratio stood at 16.84 per cent, with Tier I capital at 15.76 per cent. It added 12 branches during the quarter, taking its network to 1,662 banking outlets.
Commenting on the performance, Managing Director and Chief Executive Officer KVS Manian said the quarter marked several milestones, including record profit, total business exceeding ₹6.4 lakh crore and advances crossing ₹3 lakh crore.
He said the growth was driven by the bank’s core business, with NII rising 26 per cent and fee income increasing 32 per cent. He also highlighted the decade-low NPA levels, a 27 per cent decline in slippages and stronger provision coverage.
The bank’s restructured loan book declined to ₹1,389.55 crore, accounting for 0.46 per cent of gross advances, reflecting continued improvement in its asset quality, the release said.
UNI DS
Tags: #Federal Bank Q2 profit surges 45 pc to record Rs 1#386 crore; NPAs hit decade lows
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