Federal Bank Reports 36.57% Profit Surge in Q1 FY27; Net NPA Hits Decadal Low
Federal Bank has reported a significant jump in its net profit for the quarter ended June 30, 2026 (Q1 FY27), driven by the strength of its core franchise and expanding margins. The bank recorded a net profit of ₹1,176.93 crore, representing a 36.57% increase compared to the corresponding quarter of the previous year.The growth was underpinned by robust performance in core operations, where Net Interest Income (NII) grew by 26.06% and fee income rose by 21.71%. This performance occurred despite a volatile market period that kept treasury income subdued.
Key Financial Highlights
The bank's financial results for Q1 FY27 show significant growth across key metrics, particularly in profitability, asset quality, and balance sheet scale.| Metric | Q1 FY27 Performance | Year-on-Year Change |
|---|---|---|
| Net Profit | ₹1,176.93 crore | Up 36.57% |
| Earnings Per Share | ₹19.15 | Up 36.06% |
| Net Interest Income | ₹2,945.89 crore | Up 26.06% |
| Net Interest Margin (NIM) | 3.33% | Up 39 bps |
| Gross Advances | ₹2,81,239.54 crore | Up 14.94% |
| Total Deposits | ₹3,20,117.66 crore | Up 11.37% |
| Return on Assets (RoA) | 1.22% | Up 22 bps |
| Return on Equity (RoE) | 12.01% | Up 171 bps |
Asset Quality and Growth Segments
The bank reported its best asset quality in a decade, with the Net Non Performing Asset (NPA) ratio standing at 0.18%. The absolute figure for net NPAs decreased by 56.29% year-on-year to ₹506.04 crore. Additionally, fresh slippages saw a substantial decline of 37.79% year-on-year, reaching ₹409.48 crore.The Provision Coverage Ratio (excluding TWO) strengthened significantly to 87.37%, an increase of 1,296 bps compared to the previous year. The bank's credit cost also declined by 24 bps to 0.41%.
Growth was broad-based across several high-yielding retail segments:
- Credit Cards: Up 36%
- Gold Loans: Up 33%
- Commercial Banking: Up 22.96%
- Loan Against Property (LAP): Up 21%
- Commercial Vehicle/Commercial Equipment (CV/CE): Up 21.07%
The Corporate and Institutional Banking book also saw healthy growth of 16.12% year-on-year, surpassing the ₹1 lakh crore milestone.
Liability Franchise and Efficiency
A significant shift in the deposit mix supported a reduction in the Cost of Deposits by 57 bps year-on-year to 5.21%. CASA (Current Account Savings Account) balances grew at 18.26% year-on-year to ₹1,03,163.15 crore, outpacing overall deposit growth. The CASA ratio improved by 188 bps to reach 32.23%.The bank's Non-Resident (NR) deposits grew by 14.24% year-on-year to ₹1,05,123.41 crore. Furthermore, the Cost-to-Income ratio improved by 239 bps to 52.50%, even after accounting for annual wage revisions.
The bank's total business reached ₹5,97,615.83 crore, an increase of 13.05% year-on-year, bringing the institution close to the ₹6 lakh crore mark. During the quarter, the bank expanded its physical presence by adding 10 branches, bringing the total network to 1,650 outlets.
FEDERALBNK Stock Price Movement
Shares of The Federal Bank Limited are surging by 5.11% to ₹343.3 as of 1:59 PM today, hitting a new 52-week high. The stock is seeing active participation with a volume of 19.60 million shares as it climbs from the previous close.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
Any views, opinions, or statements expressed, where applicable, are those of the respective analysts or experts and do not reflect the views of this website. The website has no association with such viewpoints and does not assume any responsibility for them.