Federal Bank reported a record Q1 FY27 net profit of ₹1,176.93 crore, up 36.57% year-on-year, with Net NPA at a decadal low of 0.18%, NII rising 26.06%, and total business nearing ₹6 lakh crore.
Kolkata : Federal Bank posted a strong financial performance for the first quarter of FY27, reporting a record underlying net profit of ₹1,176.93 crore for the quarter ended June 30, 2026, marking a 36.57% year-on-year increase. The impressive earnings were driven by robust growth in the bank’s core business, with Net Interest Income (NII) rising 26.06% to ₹2,945.89 crore and fee income increasing 21.71%, despite subdued treasury income amid volatile market conditions. Earnings per share also climbed 36.06% to ₹19.15.
The bank's asset quality improved significantly during the quarter, with Net Non-Performing Assets (Net NPA) falling to a decadal low of 0.18%, while the absolute Net NPA declined 56.29% year-on-year to ₹506.04 crore. Gross NPA improved to 1.52%, and fresh slippages dropped 37.79% to ₹409.48 crore, reflecting continued strengthening in the loan portfolio. Provision Coverage Ratio, excluding technical write-offs, improved to 87.37%, while credit cost declined to 0.41%. Including technical write-offs, the provision coverage stood at 94.23%.
Federal Bank’s balance sheet continued to expand, with total business growing 13.05% year-on-year to ₹5.98 lakh crore, nearing the ₹6 lakh crore milestone. Total deposits rose 11.37% to ₹3.20 lakh crore, while gross advances increased 14.94% to ₹2.81 lakh crore. The bank’s CASA deposits recorded a strong 18.26% growth to ₹1.03 lakh crore, pushing the CASA ratio up by 188 basis points to 32.23%. Its Non-Resident (NR) deposit franchise also maintained healthy momentum, with NRE and ONR deposits growing 14.24% year-on-year to ₹1.05 lakh crore after crossing the ₹1 lakh crore milestone in the previous quarter.
The bank also reported healthy growth across its focus lending segments. Commercial Banking expanded 22.96%, Commercial Vehicle and Construction Equipment financing grew 21.07%, Gold Loans surged 33%, Loan Against Property (LAP) increased 21%, and Credit Card business registered a sharp 36% growth. Corporate and Institutional Banking also posted a healthy 16.12% increase, with the portfolio crossing the ₹1 lakh crore mark for the first time.
Operational efficiency improved further, with the cost-to-income ratio declining by 239 basis points year-on-year to 52.50%, despite absorbing the annual wage revision. Return on Assets (RoA) improved to 1.22%, while Return on Equity (RoE) increased to 12.01%. Book value per share rose 17.02% year-on-year to ₹161.87. During the quarter, the bank added 10 new branches, taking its total network to 1,650 outlets.
Commenting on the results, Managing Director and CEO KVS Manian said the bank’s nearly 37% profit growth during a quarter of weak treasury performance demonstrates that earnings are increasingly driven by its core banking business rather than market gains. He highlighted the significant expansion in Net Interest Margin (NIM), which rose 39 basis points year-on-year to 3.33%, as lower funding costs more than offset the decline in asset yields. He also noted that the bank’s Net NPA of 0.18% is the lowest in its recent history and that the strengthened provision coverage reflects a resilient balance sheet backed by lower credit costs and prudent risk management.
Federal Bank attributed the continued improvement in asset quality to its balanced lending strategy and growing focus on secured, granular loan segments. The restructured loan book declined to ₹1,541.30 crore, representing just 0.55% of gross advances, while the slippage ratio improved to 0.61% from 1.11% a year earlier. On the liabilities side, stronger CASA growth and sustained momentum in the NR deposit franchise helped improve the bank’s funding profile and reduce the cost of deposits to 5.21%, positioning it well for the remainder of FY27.
Kolkata : Federal Bank posted a strong financial performance for the first quarter of FY27, reporting a record underlying net profit of ₹1,176.93 crore for the quarter ended June 30, 2026, marking a 36.57% year-on-year increase. The impressive earnings were driven by robust growth in the bank’s core business, with Net Interest Income (NII) rising 26.06% to ₹2,945.89 crore and fee income increasing 21.71%, despite subdued treasury income amid volatile market conditions. Earnings per share also climbed 36.06% to ₹19.15.
The bank's asset quality improved significantly during the quarter, with Net Non-Performing Assets (Net NPA) falling to a decadal low of 0.18%, while the absolute Net NPA declined 56.29% year-on-year to ₹506.04 crore. Gross NPA improved to 1.52%, and fresh slippages dropped 37.79% to ₹409.48 crore, reflecting continued strengthening in the loan portfolio. Provision Coverage Ratio, excluding technical write-offs, improved to 87.37%, while credit cost declined to 0.41%. Including technical write-offs, the provision coverage stood at 94.23%.
Federal Bank’s balance sheet continued to expand, with total business growing 13.05% year-on-year to ₹5.98 lakh crore, nearing the ₹6 lakh crore milestone. Total deposits rose 11.37% to ₹3.20 lakh crore, while gross advances increased 14.94% to ₹2.81 lakh crore. The bank’s CASA deposits recorded a strong 18.26% growth to ₹1.03 lakh crore, pushing the CASA ratio up by 188 basis points to 32.23%. Its Non-Resident (NR) deposit franchise also maintained healthy momentum, with NRE and ONR deposits growing 14.24% year-on-year to ₹1.05 lakh crore after crossing the ₹1 lakh crore milestone in the previous quarter.
The bank also reported healthy growth across its focus lending segments. Commercial Banking expanded 22.96%, Commercial Vehicle and Construction Equipment financing grew 21.07%, Gold Loans surged 33%, Loan Against Property (LAP) increased 21%, and Credit Card business registered a sharp 36% growth. Corporate and Institutional Banking also posted a healthy 16.12% increase, with the portfolio crossing the ₹1 lakh crore mark for the first time.
Operational efficiency improved further, with the cost-to-income ratio declining by 239 basis points year-on-year to 52.50%, despite absorbing the annual wage revision. Return on Assets (RoA) improved to 1.22%, while Return on Equity (RoE) increased to 12.01%. Book value per share rose 17.02% year-on-year to ₹161.87. During the quarter, the bank added 10 new branches, taking its total network to 1,650 outlets.
Commenting on the results, Managing Director and CEO KVS Manian said the bank’s nearly 37% profit growth during a quarter of weak treasury performance demonstrates that earnings are increasingly driven by its core banking business rather than market gains. He highlighted the significant expansion in Net Interest Margin (NIM), which rose 39 basis points year-on-year to 3.33%, as lower funding costs more than offset the decline in asset yields. He also noted that the bank’s Net NPA of 0.18% is the lowest in its recent history and that the strengthened provision coverage reflects a resilient balance sheet backed by lower credit costs and prudent risk management.
Federal Bank attributed the continued improvement in asset quality to its balanced lending strategy and growing focus on secured, granular loan segments. The restructured loan book declined to ₹1,541.30 crore, representing just 0.55% of gross advances, while the slippage ratio improved to 0.61% from 1.11% a year earlier. On the liabilities side, stronger CASA growth and sustained momentum in the NR deposit franchise helped improve the bank’s funding profile and reduce the cost of deposits to 5.21%, positioning it well for the remainder of FY27.
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