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Informist, Wednesday, Apr. 29, 2026

 

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--Federal Bank Jan-Mar net profit INR 12.59 bln vs INR 10.30 bln year ago
--Analysts saw Federal Bank Jan-Mar net profit at INR 12.14 bln
--Federal Bank Jan-Mar total income INR 85.44 bln vs INR 76.54 bln year ago
--Federal Bank To pay INR 1.20 per share final dividend
--Federal Bank Jan-Mar provisions INR 7.41 bln vs INR 1.38 bln year ago
--Federal Bank Gross NPA ratio 1.62% on Mar 31 vs 1.72% qtr ago
--Federal Bank Net NPA ratio 0.20% on Mar 31 vs 0.42% qtr ago
--Federal Bank Basel III capital adequacy ratio 17.25% on Mar 31
--Federal Bank FY26 net profit INR 41.17 bln vs INR 40.52 bln year ago
--Federal Bank FY26 total income INR 321.36 bln vs INR 301.67 bln year ago
--Federal Bank Q4 net interest income INR 31.73 bln vs INR 23.77 bln yr ago
--Federal Bank Total deposits INR 3.14 tln on Mar 31, up 11% on year
--Federal Bank Net advances INR 2.65 tln on Mar 31, up 12.7% on year
--Federal Bank Jan-Mar NIM 3.74% vs 3.18% qtr ago
--Federal Bank Jan-Mar cost of deposits 5.43% vs 5.48% qtr ago
--Federal Bank Jan-Mar cost of funds 5.46% vs 5.50% qtr ago
--Federal Bank Jan-Mar yield on advances 8.65% vs 8.74% qtr ago
--Federal Bank Jan-Mar fresh slippages INR 4.74 bln vs INR 4.83 bln year ago
--Federal Bk: Reduced volume of high-value deposits to lower cost of funds
--Federal Bk Q4 PAT includes one-time tax provision reversal of INR 1.15 bln
--Federal Bank Q4 profit excluding tax provision reversal at INR 11.45 bln

 

By Pratiksha

 

NEW DELHI – Federal Bank's net profit for the quarter ended March rose on year, despite a year-on-year increase of more than five times in provisions, because of strong growth in net interest income. The jump in provisions--up 437% on year--is the sharpest in 40 quarters.

 

The Kerala-based lender reported a net profit of INR 12.59 billion, up over 22% on year. Sequentially, the net profit rose nearly 21% and exceeded the Street view of INR 12.14 billion. The rise in Federal Bank's Jan-Mar net profit on year was the highest since the December quarter of 2023, data available with Informist showed.

 

The private-sector bank's total income for Jan-Mar was up nearly 12% on year at INR 85.44 billion, buoyed by a rise of over 11% in its interest income. The lender's net interest income was up 33% on year at INR 31.73 billion. Sequentially, it was up 20%.

 

The lender released its financial results during market hours Wednesday. Its shares ended 2% lower at INR 284.75 on the National Stock Exchange.

 

The bank's provisions during the March quarter were INR 7.41 billion, compared with INR 1.38 billion in Jan-Mar last year. Of the total, the lender held INR 7.53 billion as provision for loan loss, which included INR 4.56 billion worth of floating provision.

 

The jump in provisions was in line with analysts' expectations. They had expected the lender to redirect a portion of its INR 15 billion tax refund to strengthen its provision buffer. Federal Bank received around INR 15 billion in refunds from the income tax department in February and March.

 

The lender's total profit for the quarter under review includes a one-time tax provision reversal of INR 1.15 billion. Excluding this, the net profit for the March quarter stands at INR 11.45 billion.
 

The bank's asset quality improved in the March quarter, with the net non-performing asset ratio falling to 0.20%, down 22 basis points from the December quarter and 24 bps from the year-ago quarter. The gross non-performing asset ratio, on the other hand, declined 10 basis points sequentially and 22 bps on year to 1.62%.

 

The provision coverage ratio was 87.07% at the end of March, up from 75.14% at the end of December and 75.37% at the end of March last year.

 

The bank's business performance was steady, with its net advances and total deposits rising almost 13% and 11%, respectively, to INR 2.65 trillion and INR 3.14 trillion as of Mar. 31. The lender's net interest margin rose to 3.74% in the March quarter from 3.18% in the December quarter and 3.12% in the March quarter a year ago.

 

The domestic current account savings account deposits ratio was 32.94% at the end of March, up from 32.07% in the December quarter. The cost of deposits fell 5 bps from the December quarter to 5.43%. On a year-on-year basis, the cost of deposits was down 55 bps. The lender's cost of funds fell to 5.46% in the March quarter from 5.50% a quarter ago and 6.06% a year ago. 

 

"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," Federal Bank Managing Director and Chief Executive Officer K.V.S. Manian said in a press release. Federal Bank's Jan-Mar yield on advances fell to 8.65% from 8.74% a quarter ago. 

The capital adequacy ratio based on Basel-III norms was 17.25% at the end of March, higher than 16.40% at the end of December and 15.20% at the end of March 2025. 

 

The bank reported fresh slippages of INR 4.74 billion in the March quarter, lower than INR 4.83 billion reported in the year-ago quarter. Within this, retail slippages held the highest share at INR 2.21 billion, against INR 2.26 billion a year ago.

 

The bank's board has recommended the payment of a final dividend of INR 1.20 per equity share of face value INR 2 for FY26. For FY26, the lender's net profit rose 1.6% to INR 41.17 billion. Total income rose 6.5% to INR 321.36 billion.  End

 

Edited by Rajeev Pai

 

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