CRISIL Ratings has reaffirmed its ‘CRISIL AAA/Stable’ rating on the fixed deposits (FDs) of The Federal Bank Ltd and ‘CRISIL A1+’ on short-term fixed deposits and certificates of deposit. This reflects Federal Bank’s ability to sustain asset quality, maintain healthy capitalisation, possess a strong resource profile, and a strong brand among non-resident Indians (NRIs).
Ratings Reaffirmed
Federal Bank’s long-term rating on fixed deposits (FDs) has been reaffirmed at ‘CRISIL AAA/Stable’, and short-term ratings on fixed deposits and certificates of deposit have been reaffirmed at ‘CRISIL A1+’ by CRISIL Ratings, according to a release on December 30, 2025.
Key Strengths
The ratings reflect the bank’s demonstrated ability to maintain asset quality across business cycles. It also highlights the bank’s healthy capitalisation metrics, strong resource profile, and brand recognition among non-resident Indians (NRIs).
Capital Adequacy
The bank’s capitalisation metrics remain healthy, supported by regular capital raises and internal accruals. The overall capital adequacy ratio (CAR) stood at 16.06% as of September 30, 2025. Net worth increased to Rs 36,266 crore as of September 30, 2025, driven by internal accrual.
Asset Quality
Asset quality has improved gradually post-pandemic. Gross Non-Performing Assets (GNPA) improved to 1.84% as of March 31, 2025, and remained relatively stable at 1.83% in the first half of fiscal year 2026. Net non-performing assets (NNPAs) remained range-bound at 0.48%.
Resource Profile
The bank has a healthy resource profile, particularly bolstered by its strong market position among NRIs, notably in Kerala. Deposits increased by 12.3% year-on-year, reaching Rs 2.84 lakh crore as of March 31, 2025. The deposit base stood at Rs 2.89 lakh crore as of September 30, 2025.
Profitability
Profit after tax (PAT) improved to Rs 3,928 crore in fiscal year 2024 and further increased to Rs 4,201 crore for FY25. However, H1FY26 PAT was Rs 1,966 crore. The bank anticipates improved profitability through strategic focus on mid-yield segments.
ESG Initiatives
Federal Bank has demonstrated an ongoing commitment to strengthening its Environmental, Social, and Governance (ESG) profile, which supports its already strong credit risk profile.
Source: BSE
