Federal Bank Reports 22 Percent Rise in Profit After Tax in Q4

Federal Bank Sees 22 Percent Jump in Consolidated Net Profit for Q4FY26

Federal Bank, a Kochi-based lender, reported a 22 percent jump in consolidated net profit for the quarter ended March, supported by stronger core earnings, according to company disclosures. The bank posted a net profit of Rs 1,259.1 crore in Q4FY26, as compared to Rs 1,030.2 crore in the prior corresponding period.

The bank further declared a dividend of Rs 1.20 per equity share of face value Rs 2 each (60 percent) for the financial year 2025-26. The net interest income (NII) arrived at Rs 3,173 crore for the March quarter, as compared to Rs 2,377 crore in the previous corresponding quarter, representing a 56 percent rise on a year-on-year basis.

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The bank's net interest margin - a key measure of profitability - improved to 3.74 percent in Q4 FY26, adjusting for one-offs, compared to 3.12 percent in Q4 FY25. Federal Bank's asset quality remained strong, with the net non-performing asset (NPA) ratio for the quarter coming in at 0.2 percent, improving sequentially from 0.42 percent in Q3FY26. When adjusted for one-off, the ratio came in at 0.37 percent. In Q4FY25, net NPA ratio was at 0.44 percent. The gross NPA ratio came in at 1.62 percent, as compared to 1.84 percent in Q4FY25.

The bank's total deposits grew to Rs 3.13 lakh crore in Q4, rising 11 percent on a year-on-year basis from Rs 2.83 lakh crore. The CASA ratio increased by 271 basis points to 32.94 percent from 30.23 percent. Advances stood at Rs 2.72 lakh crore, versus Rs 2.47 lakh crore.

According to the press release, the bank focused more on retail deposits, rather than high-value deposits, during the quarter, which resulted in a reduction in cost of funds to 5.46 percent in Q4 FY26, as compared to 6.06 percent in the previous corresponding quarter.

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The bank's return on assets was at 1.36 percent for the March quarter, as compared to 1.24 percent in Q4 FY25. Shares of the mid-sized private lender were down 0.4 percent as of 1450 IST.