Federal Bank Q2 Results: Net Profit Drops 10% To Rs 955 Cr, NII Surges 5% YoY; Asset Quality Remains Solid

On Saturday, October 18, Federal Bank released its financial results for the quarter that ended on September 30, 2025. The bank reported a net profit of Rs 955 Cr in Q2FY26, which dropped 10% YoY from the Rs 1,057 Cr reported in the same quarter last year, but it still increased 11% sequentially.

For the quarter that ended on September 30, 2025, net interest income increased 5.41% YoY from Rs. 2,367.23 Cr to Rs. 2,495.24 Cr. The bank's total income for the quarter increased by 3.75% YoY to Rs. 7,824.33 Cr. The quarter's annualized earnings per share (EPS) came to Rs. 15.42. The current net interest margin is 3.06. The bank's total business reached Rs. 533,576.64 Cr, representing a 6.84% YoY rise. According to the bank, its total deposits grew by 7.36% from Rs. 269,106.59 Cr. on September 30, 2024, to Rs. 288,919.58 Cr. on September 30, 2025.

On the asset side, net advances grew by more than 6.23% YoY, from Rs. 2,30,312.24 Cr. on September 30, 2024, to Rs. 2,44,657.06 on September 30, 2025. The bank's ROA and ROE for the quarter were 1.09% and 11.01%, respectively. With a gross non-performing asset (NPA) of Rs. 4,532.01 Cr at the end of Q2 FY26, the bank reported good asset quality. This represents 1.83% of gross advances.

As of September 30, 2025, the Net NPA and Net NPA as a percentage of Net Advances were Rs. 1,165.16 Cr and 0.48%, respectively. With technical write-offs excluded, the provision coverage ratio was 73.45%.

Mr. KVS Manian, Managing Director & CEO said: "Having spent over a year in this role, I have a deep sense of conviction about where the Bank stands today and the direction we're headed. Over the past few quarters, we've undertaken several strategic reorientations to strengthen our foundation and build for the future - and the results are beginning to show."

"Our CASA franchise continues to demonstrate sustained and meaningful growth, reflecting the trust of our customers and the consistency of our team's execution. We're also broadening our asset mix thoughtfully, increasing the share of our mid-yield portfolio in a measured and disciplined way. At the same time, our fee income has seen strong, double-digit sequential growth, underscoring the breadth and resilience of our earnings," he said.

"Our asset quality remains solid, supported by prudent risk management and a balanced approach to growth. As we look ahead, we're shaping an organisation that's agile in its thinking, disciplined in its actions, and firmly anchored in the stability and values that define Federal Bank," KVS Manian further added.

As of September 30, 2025, the bank's net worth has grown by 11.93% year on year, from Rs. 31,108.20 Cr to Rs. 34,819.84 Cr. At the end of the quarter, the bank's Capital Adequacy Ratio (CRAR), which was calculated in accordance with Basel III regulations, was 15.71 percent. There are 1595 banking facilities overall. As of September 30, 2025, there were 2082 ATMs and recyclers (including mobile ATMs).