Federal Bank posted a 15% YoY decline in net profit, coming in at ₹862 crore for Q1 FY26. Sequentially, profit also fell by over 16%. Despite the dip in profit, operating performance remained strong with an operating profit of ₹1,556 crore. The bank’s Net Interest Income (NII) grew marginally by 1.96% YoY to ₹2,337 crore, while total income rose 7.64% to ₹7,800 crore. However, Net Interest Margin (NIM) remained under pressure at 2.94%. On the positive side, loan growth was healthy—net advances rose by 9.2% YoY to over ₹2.41 lakh crore. Retail loans jumped 15.6%, commercial loans surged 30.3%, and business banking grew over 6%. Deposits also went up by 8% YoY to ₹2.87 lakh crore. Asset quality showed minor stress, with Gross NPA at 1.91% and Net NPA at 0.48%. Credit costs were elevated due to slippages in the agri and MFI segments, but management expects them to stabilise going ahead. 📌 Bottom Line: While profitability dipped, the bank maintained strong growth in loans and deposits. Asset quality remains broadly under control, with management confident about recovery in the coming quarters.

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