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Federal Bank Q1 Net Profit Drops 15% YoY to ₹861.8 Crore

2 Aug 2025 , 10:26 PM

Federal Bank on Thursday reported a dip in its June quarter earnings, with standalone net profit slipping nearly 15% year-on-year to ₹861.8 crore. The private lender had posted a profit of ₹1,010.6 crore in the same period last year, marking a noticeable break from the strong momentum seen over previous quarters.

A key concern during the quarter was asset quality. Gross Non-Performing Assets (GNPAs) rose to ₹4,669.6 crore from ₹4,375.5 crore in the March 2025 quarter. As a percentage of total loans, the GNPA ratio inched up to 1.91%. This is compared to 1.84% in Q4FY25.

Net NPAs also saw an uptick, increasing to ₹1,157 crore from ₹1,040.3 crore sequentially. The net NPA ratio moved up to 0.48%, from 0.44% in the previous quarter, suggesting growing stress in the bank’s loan book.

Newly appointed MD & CEO KVS Manian pointed out that the spike in slippages was largely due to seasonal pressures in rural lending, especially in the agriculture portfolio. He added that the bank expects these pressures to ease over the coming quarters, leading to a normalisation in credit costs.

On the operational front, Net Interest Income registered a 2% growth, coming in at ₹2,336.8 crore. This is compared to ₹2,292 crore in the year-ago quarter.

Loan growth remained healthy, with advances rising 9% year-on-year to ₹2.41 lakh crore. This is driven by broad-based demand across retail, SME, and corporate segments.

Deposits rose 8% on a yearly basis to ₹2.87 lakh crore. The bank saw steady traction in retail deposits and maintained its focus on expanding its low-cost CASA (Current Account and Savings Account) base.

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Related Tags

  • Bank News
  • Federal Bank
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  • Indian Market News
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