Federal Bank Q1 profit jumps 36.6% to ₹1,177 crore
Federal Bank reported a 36.57% YoY increase in Q1FY27 net profit to ₹1,176.93 crore, fueled by a 26.06% rise in Net Interest Income and margin expansion. Asset quality improved significantly, with Net NPA falling to 0.18% and fresh slippages dropping 37.79% YoY. Total deposits grew 11.37% to ₹3,20,117.66 crore, while CASA increased 18.26%.
*this image is generated using AI for illustrative purposes only.
Federal Bank reported a net profit of ₹1,176.93 crore for the quarter ended June 30, 2026, a 36.57% increase from the corresponding period of the previous year. The bank's total business reached ₹5,97,615.83 crore, approaching the ₹6 lakh crore mark, supported by a 14.94% growth in gross advances. The Board of Directors approved the unaudited standalone and consolidated financial results for the quarter at its meeting held on July 17, 2026.
Revenue and Profitability
The bank's core earnings engine showed strong momentum, with Net Interest Income growing 26.06% to ₹2,945.89 crore. Net Interest Margin expanded 39 basis points year-on-year to 3.33%, aided by a 57 basis points decline in the Cost of Deposits to 5.21%. Fee income rose 21.71%, while operating efficiency improved as the Cost-to-Income ratio reduced by 239 basis points to 52.50%. Return on Assets improved to 1.22% and Return on Equity expanded to 12.01%.
| Metric: | Q1FY27 | Q1FY26 |
|---|---|---|
| Net Profit (₹ crore) | 1,176.93 | — |
| Net Interest Income (₹ crore) | 2,945.89 | — |
| Net Interest Margin (%) | 3.33 | — |
| Cost-to-Income Ratio (%) | 52.50 | — |
Asset Quality Improves
Asset quality metrics reached historic best levels during the quarter. Net Non-Performing Assets (NNPA) ratio fell to 0.18%, a decadal low for the bank, while Gross Non-Performing Assets (GNPA) ratio improved to 1.52%. Fresh slippages declined 37.79% year-on-year to ₹409.48 crore. The Provision Coverage Ratio (excluding technical write-offs) strengthened to 87.37%, providing a strong buffer against potential losses.
| Asset Quality Metric: | Q1FY27 | Q1FY26 |
|---|---|---|
| GNPA (%) | 1.52 | — |
| NNPA (%) | 0.18 | — |
| Fresh Slippages (₹ crore) | 409.48 | — |
| Provision Coverage Ratio (%) | 87.37 | — |
Key Highlights
- Net profit rose 36.57% YoY to ₹1,176.93 crore.
- Net Interest Income grew 26.06% to ₹2,945.89 crore.
- Net NPA improved to a decadal low of 0.18%.
- CASA balances grew 18.26% YoY to ₹1,03,163.15 crore.
- Total deposits stood at ₹3,20,117.66 crore, up 11.37% YoY.
- Capital Adequacy Ratio under Basel III stood at 16.97%.
The unaudited financial results were subjected to a limited review by the Joint Statutory Auditors, M S K A & Associates LLP and Suri & Co. The bank added 10 branches during the quarter, taking its total network to 1,650 outlets.
Historical Stock Returns for Federal Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +6.86% | +6.48% | +8.86% | +29.14% | +62.56% | +297.04% |
Can Federal Bank maintain the current Net Interest Margin expansion given the declining Cost of Deposits?
What strategies will the bank employ to sustain the 14.94% growth in gross advances amid potential economic slowdowns?
How will the historic low Net NPA ratio of 0.18% impact the bank's future lending policies and risk appetite?
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