More Stories

Informist, Wednesday, Apr. 29, 2026

--Federal Bank: Don't see much impact from ECL norms as asset quality strong 

--Federal Bank: Acceleration in deposits, advances growth to continue FY27 

--CONTEXT: Comments by Federal Bank mgmt in post-earnings conference call 

By Priyasmita Dutta and Shakshi Jain

NEW DELHI – Federal Bank expects the acceleration in growth of its advances and deposits in 2025-26 (Apr-Mar) to continue in the current fiscal as well, the bank's management said Wednesday. The bank has identified areas of focus on the assets and liabilities sides and will continue to build on them, the management said at a post-earnings call with analysts. 

"We have clearly seen acceleration in all the areas we have chosen, and we continue to build on this acceleration, and it will get better," the management said. "YoY (year-on-year), the loan growth last year (FY25) was 8%, and today (FY26) it is 13%. So, obviously, there is traction building up, and we are confident of building traction further from here," Managing Director and Chief Executive Officer K.V.S. Manian said. 

The bank's business performance was steady during FY26, with net advances and total deposits rising almost 13% and 11% to INR 2.65 trillion and INR 3.14 trillion, respectively, 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. Federal Bank's focus areas include mobilising low-cost liabilities and retail term deposits to fund the credit growth. 

Speaking on the expected credit loss norms notified by the Reserve Bank of India on Monday, the bank's management said the impact would be limited, given the bank's robust asset quality. "We do hope that given our robust asset quality, our impact should be reasonable," he said. 

Under the new framework, banks will adopt a staged approach to provisioning based on changes in credit risk, while continuing the existing system for identifying non-performing assets. The central bank has also clarified the categorisation of stressed assets, which may lead banks to set aside higher provisions based on the new classifications. These norms take effect on Apr. 1, 2027. 

Financial results released earlier in the day showed that the Kerala-based lender's net profit rose over 22% on year to INR 12.59 billion for the March quarter. Sequentially, net profit rose nearly 21%. The on-year growth in Federal Bank's Jan-Mar net profit was the highest since the December quarter of 2023, data available with Informist showed. The bank's total income grew nearly 12% on year to INR 85.44 billion in Jan-Mar, while net interest income increased 33% on year at INR 31.73 billion. Sequentially, it was up 20%. Wednesday, the bank's shares closed at INR 284.75 on the National Stock Exchange, down 2% from the previous close.  End

Edited by Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.