Federal Bank Reports Q2 FY26 Financial Results with Net Profit Decline and Income Growth

Federal Bank announced its financial results for the quarter ending September 30, 2025. The bank recorded a net profit of Rs 955 crore in Q2FY26, marking a 10% decrease from Rs 1,057 crore in the same period last year. However, this figure represents an 11% increase compared to the previous quarter.

Net interest income rose by 5.41% year-on-year, reaching Rs 2,495.24 crore from Rs 2,367.23 crore. The total income for the quarter saw a 3.75% increase year-on-year, amounting to Rs 7,824.33 crore. Earnings per share (EPS) for the quarter were reported at Rs 15.42, with a net interest margin of 3.06.

The bank's total business reached Rs 533,576.64 crore, reflecting a year-on-year growth of 6.84%. Total deposits increased by 7.36%, rising from Rs 269,106.59 crore on September 30, 2024, to Rs 288,919.58 crore on September 30, 2025.

On the asset front, net advances grew by over 6.23% year-on-year, moving from Rs 230,312.24 crore on September 30, 2024, to Rs 244,657.06 crore on September 30, 2025. The bank's return on assets (ROA) and return on equity (ROE) for the quarter were recorded at 1.09% and 11.01%, respectively.

The bank maintained good asset quality with gross non-performing assets (NPA) amounting to Rs 4,532.01 crore at the end of Q2 FY26, which is equivalent to 1.83% of gross advances. Net NPA stood at Rs 1,165.16 crore or 0.48% of net advances.

Excluding technical write-offs, the provision coverage ratio was reported at 73.45%. The bank's net worth increased by 11.93% year-on-year from Rs 31,108.20 crore to Rs 34,819.84 crore as of September 30, 2025.

Strategic Reorientations and Future Outlook

Mr KVS Manian, Managing Director & CEO stated: "Having spent over a year in this role, I have a deep sense of conviction about where the Bank stands today and the direction we're headed."

"Our CASA franchise continues to demonstrate sustained and meaningful growth," he added while highlighting the trust customers have in their services and consistent execution by their team.

The bank's Capital Adequacy Ratio (CRAR), calculated under Basel III norms, stood at a robust 15.71% at the end of the quarter.

Infrastructure and Technological Advancements

The bank operates with a network of 1,595 banking facilities and has expanded its ATM and recycler count to include a total of 2,082 units as of September 30, 2025.

"Our asset quality remains solid," Mr Manian further commented on their prudent risk management approach and balanced growth strategy.