Federal Bank reported a substantial 36.6% year-on-year increase in net profit for the first quarter of FY27, reaching ₹1,177 crore. This growth was driven by a 26.1% rise in Net Interest Income and improved operational efficiency, evidenced by a 239 bps reduction in the cost-to-income ratio. The bank also maintained its strong asset quality with a Net NPA of 0.18% and a robust Capital Adequacy Ratio of 16.97%.
Federal Bank Reports Strong Q1 FY27 Earnings
Federal Bank has announced robust financial results for the first quarter ending June 30, 2026, with its net profit surging by 36.6% year-on-year to ₹1,177 crore. This performance marks a record for the quarter on an underlying basis, driven by significant improvements in key financial metrics.
Key Financial Highlights
- Net Profit: Increased by 36.6% YoY to ₹1,177 crore.
- Net Interest Income (NII): Grew by 26.1% YoY to ₹2,946 crore.
- Net Interest Margin (NIM): Expanded by 39 basis points YoY to 3.33%.
- Cost-to-Income Ratio: Improved by 239 basis points YoY to 52.50%.
- Return on Equity (ROE): Rose to 12.01% from 10.30% in the previous year.
- Earnings Per Share (EPS): Increased by 36.1% YoY to ₹19.15.
Asset Quality and Capital Strength
The bank demonstrated continued strength in its asset quality, with Gross NPA (GNPA) at 1.52% and Net NPA (NNPA) at a decadal low of 0.18%. Provision Coverage Ratio stood at a healthy 87.4%. Federal Bank also maintained a strong capital position, with a Capital Adequacy Ratio (CRAR) of 16.97% and a Tier-1 Capital Ratio of 15.89% as of Q1 FY27.
Deposit Franchise and Funding
The bank highlighted its highly granular deposit franchise, with 85% of funding being granular. CASA deposits crossed ₹1 lakh crore in FY26 and grew 18% YoY in Q1FY27. NRI deposits also surpassed the ₹1 lakh crore mark in FY26, reflecting the strength of its non-resident customer base.
Strategic Initiatives
The presentation also detailed the progress of ‘Project Breakthrough 4.0’, the bank’s multi-year transformation program, which is well underway with early positive outcomes visible in operating performance. The bank emphasized its focus on deepening customer relationships, expanding fee businesses, and maintaining disciplined risk management.
Source: BSE
