Federal Bank Q4 earnings: Net profit rises 22% to ₹1,259 crore, NII advances 33%

Federal Bank, the country's leading private sector lender, on Wednesday, April 29, reported a net profit of ₹1,259 crore in January-March quarter, marking an increase of 22% from ₹1,030 crore in the same period last year. The bank's provisions for bad loans during the quarter jumped sharply to ₹741 crore at the end of March quarter compared with ₹138 crore in the year-ago period.

The Kerala-based lender's net interest income or the difference between interest earned on loans and expended on deposits surged by 33% to ₹3,173 crore in fourth quarter of financial year 2025-26 as against ₹2,377 crore in the year-ago period.

Federal Bank's asset quality showed a slight improvement in March quarter as its gross non-performing assets (NPA), as a percentage of total advances, came in at 1.62% compared with 1.84% in the year-ago period.

In absolute terms, gross NPAs came in at ₹4,335 crore as against ₹4,375 crore.

The bank successfully optimized its funding profile by focusing on retail liabilities and deliberately reducing the volume of high-value deposits to lower the overall cost of funds.

The bank's total business reached ₹5,78,503.76 crore, registering 4.54% quarter on quarter (QoQ) growth, gross advances rose to ₹2,68,369.03 crore, up 3.65% QoQ, led by commercial banking, retail, and the CV/CE segments.

Federal Bank's total deposits rose to ₹3,13,909.39 crore, up 5.41% QoQ, led by resident and NR book and CASA balances grew to ₹1,03,390.30 crore, up 8.26% QoQ, crossing the ₹1 lakh crore milestone, the bank said in a press release.

“Our Q4 performance represents a strong operational quarter that is fully aligned with our strategic roadmap. We have made significant progress in restructuring our liabilities by focusing on retail mobilization and reducing reliance on high-value deposits, which is reflected in our optimized cost of funds. Reaching the ₹1 lakh crore milestone in both CASA and NR deposits concurrently is a structural achievement that reinforces our funding moat," said KVS Manian, Managing Director & CEO.

During the quarter Federal Bank added 39 new branches.

"This expansion and restructuring process has been elevated through a highly data driven approach, leveraging detailed studies by external experts. These insights are helping the Bank build a solid, data-driven branch network designed for maximum impact and efficiency," Federal Bank added.

Federal Bank shares declined 0.62% to ₹288 after its earnings announcement.