Federal Bank Q3 FY26: Net Profit ₹1,041 Cr (+9% QoQ), NII ₹2,653 Cr (+9% YoY)
Federal Bank reported Q3 FY26 net profit of ₹1,041.21 crore, up 9% QoQ. NII rose 9.11% YoY to ₹2,652.73 crore, and NIM expanded to 3.18%. Asset quality improved with GNPA at 1.72% and NNPA at 0.42%. The bank increased its stake in Ageas Federal Life Insurance to 30% and welcomed a strategic investment from Blackstone.
The announcement details strong quarterly financial results with record-breaking metrics, significant improvements in asset quality, and strategic corporate actions like stake increase in a subsidiary and a major investment from Blackstone. These factors are likely to have a substantial positive impact on the bank's stock.
The bank reported record highs in NII, operating profit, and fee income, with significant YoY and QoQ growth in net profit and key financial metrics. Asset quality improved, and strategic investments were made, indicating a strong financial performance and positive outlook.
Federal Bank has reported a robust performance for the quarter ended December 31, 2025 (Q3 FY26), achieving record Net Interest Income (NII), operating profit, and fee income. The bank's net profit stood at ₹1,041.21 crore, marking a 9% increase quarter-on-quarter (QoQ). NII grew by 9.11% year-on-year (YoY) to ₹2,652.73 crore, with Net Interest Margin (NIM) expanding by 12 basis points (bps) QoQ to 3.18%.
The bank's total business reached ₹5,53,364.49 crore, an 11.40% YoY growth. Advances increased by 10.94% YoY to ₹2,55,568.67 crore, and deposits grew by 11.80% YoY to ₹2,97,795.82 crore. The CASA ratio improved to 32.07%, with CASA balances growing 18.86% YoY. Fee income also saw strong growth, rising 18.57% YoY to ₹896.47 crore.
Asset quality further strengthened, with Gross NPA at 1.72% and Net NPA at 0.42%, reaching decadal lows. The Cost-to-income ratio improved to 53.92%, and ROA stood at 1.15% with ROE at 11.68%. Earnings Per Share (EPS) was ₹16.79, an 8.89% increase QoQ.
Mr. KVS Manian, Managing Director & CEO, commented that the performance reflects the bank's strengthening fundamentals, balance sheet discipline, and execution focus, leading to improved margins, reduced funding costs, and stable asset quality. He highlighted a calibrated shift towards segments delivering superior risk-adjusted returns.
In strategic developments, Federal Bank increased its stake in Ageas Federal Life Insurance Company from 26% to 30% by acquiring 3.2 crore shares at ₹30.45 per share in November 2025. The bank also welcomed a strategic minority investment from Blackstone, which received necessary approvals. Additionally, Federal Bank unveiled a refreshed brand identity, 'The Fortuna Wave'. The bank added six branches during the quarter.
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