📈 Federal Bank Q1 FY26 Results: Profit Dips 15% YoY Amid Higher Provisions, Fee Income Hits Record High

📈 Federal Bank Q1 FY26 Results: Profit Dips 15% YoY Amid Higher Provisions, Fee Income Hits Record High Federal Bank reported a mixed set of numbers for Q1 FY26. While the lender saw healthy business growth and record-high fee income, profitability was dented by higher credit costs, primarily from stress in its microfinance portfolio. The bank’s net profit fell 15% YoY to ₹862 crore, down from ₹1,010 crore in Q1 FY25. This was mainly due to a 60% spike in provisions, which stood at ₹695 crore. Net Interest Income (NII) declined 2% sequentially to ₹2,337 crore, while Net Interest Margin (NIM) compressed to 2.94%, down from 3.12% last quarter. On the positive side, fee and other income rose 22% YoY to ₹1,113 crore, its highest ever. Advances grew 10% YoY to ₹2.45 lakh crore, while deposits rose 8% YoY to ₹2.87 lakh crore. The CASA ratio improved to 30.35%, driven by robust savings deposit mobilization. Asset quality remained steady, with GNPA at 1.91% and NNPA at 0.48%, though slippages were higher due to the MFI segment. Provision coverage remained strong at 74.4%. Overall, the bank remains well-capitalized and operationally stable, but pressure on margins and MFI risks warrant caution in the near term.