Kerala-based private lender Federal Bank reported a strong March quarter performance, with net profit rising 22 percent year-on-year, supported by robust growth in core income and improving asset quality.
The bank posted a net profit of ₹1,259 crore for the fourth quarter of FY26, compared with ₹1,030 crore in the same period last year.
Net interest income (NII), a key measure of core earnings, grew sharply by 33 percent to ₹3,174 crore, reflecting healthy loan growth and stable margins. Operating profit also saw strong traction, rising more than 55 percent to ₹2,276 crore.
Net interest margin (NIM) improved to 3.74 percent, significantly higher than last year, indicating better profitability from lending operations.
Asset quality improved further:
Gross NPA declined to 1.62 percent
Net NPA eased to 0.2 percent
This signals continued strengthening of the bank’s balance sheet.
A key highlight of the quarter was the strong growth in low-cost deposits:
CASA (current and savings account) deposits crossed ₹1 lakh-crore
NRI deposits also surpassed the ₹1 lakh-crore mark
This reinforces the bank’s strong franchise in Kerala and among overseas Indian customers.
Strong deposit growth improves funding costs
Higher CASA ratio supports margins
Stable asset quality reduces credit risk
Overall, the results indicate steady momentum for Federal Bank, with growth in both income and deposits, while maintaining healthy asset quality—key positives for investors tracking Kerala-based banking stocks.
