Federal Bank Q1 FY27 Profit Soars 36.57% to ₹1,177 Cr; Net NPA at Decadal Low
Federal Bank reported a record Q1 FY27 net profit of ₹1,177 crore, up 36.57% YoY. Net NPA fell to a decadal low of 0.18%. NIM expanded 39 bps to 3.33%. Total business neared ₹6 lakh crore. CASA grew 18.26% YoY.
The announcement details significant financial performance improvements, including record profits and a decadal low in net NPAs. These strong results are likely to positively impact investor sentiment and the bank's stock performance.
The bank reported record profits, significant YoY growth in net profit and net interest income, expansion in NIM, improvement in asset quality (decadal low net NPA), strong deposit growth (especially CASA and NR deposits), and improved operating efficiency. These are all strong positive indicators.
Federal Bank reported a record quarterly net profit of ₹1,176.93 crore for the quarter ended June 30, 2026 (Q1 FY27), marking a significant year-on-year increase of 36.57%.
The bank's core operations drove this growth, with net interest income rising by 26.06% and fee income by 21.71%, despite subdued treasury income due to market volatility. Sequential comparisons are presented on a Business As Usual (BAU) basis, excluding a one-off windfall gain from Q4 FY26, ensuring like-for-like year-on-year comparisons.
Key highlights for Q1 FY27 include a net profit of ₹1,176.93 crore, with earnings per share increasing by 36.06% to ₹19.15. Net interest income grew to ₹2,945.89 crore, outpacing advances growth of 14.94%. The Net Interest Margin (NIM) expanded by 39 basis points year-on-year to 3.33%, aided by a 57 basis points decline in the cost of deposits to 5.21%.
Asset quality reached a decadal best with Net NPA at 0.18% (down 56.29% YoY) and Gross NPA improving to 1.52%. Fresh slippages decreased by 37.79% YoY to ₹409.48 crore. The Provision Coverage Ratio (excluding technical write-offs) strengthened to 87.37%, and credit cost declined by 24 basis points to 0.41%.
Total business reached ₹5,97,615.83 crore, a 13.05% year-on-year increase. Total deposits grew by 11.37% to ₹3,20,117.66 crore, and gross advances increased by 14.94% to ₹2,81,239.54 crore. The CASA franchise showed robust growth, with CASA balances up 18.26% YoY to ₹1,03,163.15 crore, improving the CASA ratio to 32.23%.
Non-Resident (NR) deposits reached ₹1,05,123.41 crore, up 14.24% YoY. The bank saw strong momentum in chosen segments like Commercial Banking (up 22.96%), CV/CE (up 21.07%), Gold Loans (up 33%), LAP (up 21%), and Credit Cards (up 36%). Corporate & Institutional Banking book surpassed ₹1 lakh crore.
Operating efficiency improved, with the Cost-to-Income ratio decreasing by 239 basis points YoY to 52.50%. Return on Assets (RoA) improved by 22 basis points YoY to 1.22%, and Return on Equity (RoE) expanded by 171 basis points YoY to 12.01%. The bank added 10 branches, expanding its network to 1,650 outlets.
MD & CEO, Mr. KVS Manian, highlighted that the profit growth demonstrates the strength of the core business, not market gains. He emphasized the record-low net NPA and strong provision coverage, building a resilient balance sheet. The bank enters the rest of the year with a strong capital position, excellent asset quality, and good business momentum.
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The Federal Bank Limited filed this with the NSE as a statutory disclosure, categorised under quarterly results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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