Federal Bank Q2FY26 Profit Ups 10.85%; Shares Rally Over 6%

Kochi, October 20, 2025 – Federal Bank Ltd posted robust numbers for the second quarter ended September 30, 2025, with net profit up 10.85% sequentially at ₹955.26 crore, aided by all-time high net interest income and strong fee income. As of 2:14pm IST the stock responded positively, rising 6.82% to ₹226.87 in today’s trade from the last close of ₹212.38, achieving a new 52-week high.

Q2FY26 Financial Performance

Federal Bank’s overall business stood at ₹5.33 lakh crore, led by consistent growth in deposits and advances. Total deposits grew 7.36% YoY to ₹2,88,919 crore, with net advances up 6.23% to ₹2,44,657 crore. Net interest income was at ₹2,495 crore, an increase of 5.41% YoY, with net interest margin up 12 basis points sequentially to 3.06%. Fee income also saw substantial growth, up 13% to ₹885.54 crore, evidencing robust retail and transactional performance.

The profitability of the bank continued to be strong, with return on assets at 1.09% and return on equity at 11.01%. Operating profit for the quarter went up 5.03% to ₹1,644 crore and total income by 3.75% to ₹7,824 crore. Asset quality improved further, with gross NPA at 1.83% and net NPA at 0.48%, one of the best for mid-sized private sector banks. CASA deposits grew to ₹89,591 crore, increasing the CASA ratio to 31.01%, a growth of 94 basis points over the past year.

Balance Sheet Strength

Federal Bank had a robust capital position with a capital adequacy ratio of 15.71% higher by 51 basis points from Q2FY25 backed by a Tier I ratio of 14.37%. Net worth increased almost 12% to ₹34,820 crore, which is a good cushion for growth and risk absorption. The provision coverage ratio was healthy at 73.45%, which covered against potential loan losses well.

Management Commentary

Managing Director and CEO K.V.S. Manian said, “In the last few quarters, we have initiated various strategic moves to consolidate and build for the future. Our CASA franchise has continued to show consistent growth, and fee income has seen robust double-digit sequential growth. Going forward; we will continue to be agile, disciplined, and stable and deliver consistent returns to our stakeholders.”

Market Reaction

Federal Bank share price  jumped more than 6% in early trade, touching an intra-day high of ₹224.95 and reinforcing investor belief in the bank’s operational and financial strength. Trading volumes remained strong, with a delivery percentage of over 60%, indicating good retail as well as institutional participation. The stock’s one-year performance has also surpassed a number of mid-sized private sector banks, highlighting its increasing attractiveness to investors interested in stable earnings and low-risk growth.

About Federal Bank

Established in 1931 and having its headquarters in Aluva, Kerala, Federal Bank Ltd is a premier private sector bank with a large array of retail, SME, and corporate banking products. Spread across 1,595 branches and 2,082 ATMs in India, the bank is a major part of the NIFTY Bank index and has shown consistent strong fundamentals, operational robustness, and shareholder-friendly expansion.

REF: https://nsearchives.nseindia.com/corporate/FEDERALBNK_18102025120651_FBL_Press_Release_181025_S.pdf

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