Federal Bank Q3FY26 Profit Rises 9% on Strong Loan Growth and Improving Asset Quality

Federal Bank delivered a steady performance in the December quarter of FY26, supported by healthy loan growth, improved asset quality and stable core income. The private sector lender reported a **9% year-on-year and quarter-on-quarter rise in net profit at ₹1,041 crore**, reflecting sustained momentum across key business segments. **Net interest income (NII)** increased by over **9% to ₹2,653 crore**, aided by growth in advances and better yield management. Total advances rose **9% year-on-year to ₹2.65 trillion**, driven largely by strong traction in commercial and corporate banking. Deposit growth remained robust, outpacing advances, with deposits rising **15% to ₹2.50 trillion**, strengthening the bank’s funding profile. On the asset mix front, **retail loans**, which account for about **55% of customer assets**, grew **9% to ₹94,886 crore**. The **commercial loan book expanded 25% year-on-year to ₹28,177 crore**, while **corporate loans increased 5% to ₹1.42 trillion**. Asset quality continued to improve during the quarter. The **gross NPA ratio declined to 1.72% from 1.83%**, while **net NPA improved to 0.42% from 0.48%** sequentially, supported by lower slippages of ₹435 crore. Following the results, **Federal Bank shares surged about 8.6% on the NSE**, reflecting positive investor response to consistent profitability and improving balance sheet metrics. *Disclaimer: This article is for informational purposes only and does not constitute investment advice.*