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Informist, Friday, Jul. 17, 2026

 

--Federal Bk: Credit card business is a focus area for bank 

--CONTEXT: Federal Bank mgmt speaking at post-earnings press conference 

--Federal Bk: Seen interest from Middle East, Singapore, Hong Kong for FCNR (B) 

--Federal Bk: Have not seen US-Iran war impact on our books as of now 

--Federal Bk: Open to inorganic growth going ahead 

--Federal Bk: Have been cautious of growth in micro-finance segment 

--Federal Bk: Deposit growth has been robust, irrespective of FCNR(B) 

--Federal Bk:Not very active in co-lending space; exploring few partnerships

 

MUMBAI/NEW DELHI – The credit card business remains a focus area for Federal Bank, the bank's management said at a post-earnings press conference Friday. "...by the end of this calendar, we will also integrate the Standard Chartered India card portfolio as well," the management said. Federal Bank had said in April that it would acquire a select portfolio of retail credit cards from Standard Chartered Bank India.

 

In the June quarter, Federal Bank's credit card business grew 36% on year and 10% on quarter. "...there are two parts to our credit card business. One is what we call the organic, our own issue to our own customers, existing customers. And second is what we issue with our partners," the management said. The bank continues to grow both the parts reasonably healthily, the management said.

 

On the foreign currency non-resident bank deposits front, Federal Bank said it intends to get a fair share of it. "Through the next quarter, we'll be able to give a better idea on that. But I think we hold a decent share, market share in that market and we will get our fair share," the management said. 

 

The lender's total deposits grew over 11% on year to INR 3.20 trillion as of Jun. 30, while net advances rose 15% on year to INR 2.77 trillion. 

 

The bank did not disclose the amount of FCNR(B) deposits it has received so far. "We have had early flows, both leveraged and unleveraged flows we have had," the management said. The lender has seen interest on FCNR(B) deposits coming from West Asia, Singapore and Hong Kong.

 

The war in West Asia has not impacted Federal Bank's existing loan book or onboarding of new customers, the management said. The bank is being careful about the sectors which are likely to be more impacted if the war continues.

 

It will monitor the market to decide on external commercial borrowings. "We'll watch the market and watch the prices and see whether it makes economic sense for us. We will remain alert to that opportunity," the management said. 

 

Mid-market remains the bank's focus in corporate banking. "What we have been guiding in corporate banking is that we will be very selective in where we look at," the management said. "Some of the areas in corporate banking which we have been consciously focusing on has been our supply chain initiatives. Then we are looking at the real estate sector in a more focused manner."

 

Federal Bank's management said it retained the guidance on the net interest margin expanding 5–6 basis points per quarter. "This is a guidance we have given for next three-four quarters," the management said. Federal Bank's net interest margin for the June quarter was 3.33%, down 41 bps sequentially.

 

The bank said it is always looking for growth through inorganic opportunities. "Standard Chartered is the first one we did. But we will keep evaluating and if something worthwhile, which is accretive, from our shareholders' perspective, we will look for it," the management said.

 

Credit cards, personal loans and microfinance are the primary unsecured products for Federal Bank. "...this quarter, both our credit card and personal finance have grown in a reasonable, robust growth rate. MFI (microfinance), we have been cautious, and of course, with the monsoon being what it is, we are being a bit cautious," the management said. While it is not very active in the co-lending space, the lender is exploring a few partnerships in the segment.

 

The Kerala-based lender's net profit for the June quarter grew at the fastest pace in 12 quarters to INR 11.77 billion on the back of a healthy growth in net interest income and a fall in provisions. 

 

Federal Bank announced its financial results for the June quarter during market hours. On Friday, shares of the bank closed nearly 7% higher at INR 349 apiece on the National Stock Exchange.  End

 

Reported by Nandini Sinha and Sagar Sen

Edited by Avishek Dutta

 

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