Federal Bank Q2 Results: Net Profit Jumps 45% to Record ₹1,386 Crore; NII Rises 26%

16 Oct 2026 , 04:07 PM

Federal Bank recorded its highest standalone quarterly net profit ever of ₹1,386.09 crore in Q2 FY27 which is a 45.10% YoY growth from ₹955 crore in the corresponding quarter of the previous financial year. Net profit recorded a sequential growth from ₹1,177 crore in Q1 FY27 of 17.77%. Good performance of the bank came through higher net interest income (NII), improved net interest margins (NIM), increased fees income and good quality of assets. The bank reported healthy growth of deposits and advances as it crossed ₹6.4 lakh crore with the business as of the end of September 2026.

Federal Bank Q2 FY27 Results: Highlighting the Key Points

Metric	Q2 FY27	Year-on-Year Comparison
Standalone Net Profit	₹1,386.09 crore	Up 45.10%
Sequential Net Profit Growth	—	Up 17.77%
Net Interest Income (NII)	₹3,153.40 crore	Up 26.38%
Net Interest Margin (NIM)	3.32%	Up 26 basis points
Operating Profit	₹2,225.37 crore	Up 35.35%
Other Income	₹1,490.44 crore	Up 37.73%
Fee Income	₹1,167.71 crore	Up 31.86%
Gross NPA	1.32%	Down from 1.83%
Net NPA	0.17%	Down from 0.48%
Total Business	Over ₹6.4 lakh crore	Up 20.12%
Advances	₹3.02 lakh crore	Up 21.66%
Total Deposits	₹3.43 lakh crore	Up 18.61%
CASA Balances	₹1.10 lakh crore	Up 22.56%
Return on Assets (RoA)	1.32%	Improved
Return on Equity (RoE)	13.57%	Improved
Capital Adequacy Ratio	16.84%	As of September 2026
Credit Costs	0.31%	Declined

Federal Bank Results Q2: Net Interest Income Increases by 26%

Federal Bank’s net interest income improved by 26.38% over the year-ago period to ₹3,153.40 crore in Q2 FY27. NII represents the difference between the interest the bank earns by giving loans and investments and pays out on deposits and borrowing. The improvement in NII came with an improvement in the net interest margin rising 26 basis points from the same period last year to 3.32%. The NIM reflects the amount the bank is earning by using its interest-earning assets. Operating profit grew 35.35% to ₹2,225.37 crore. The bank reported other’s income rising 37.73% to ₹1,490.44 crore and fees income rising 31.86% to ₹1,167.71 crore in Q2 FY27. The growth in interest income and non-interest income drove the record quarterly net profit of the bank.

Federal Bank Assets Grow Beyond ₹6.4 Lakh Crore

Federal Bank reported improving asset quality during the second quarter with both gross and net non-performing assets (NPAs) reaching a decade-low. Gross NPA came down to 1.32% with the NPA of last year being 1.83%. Net NPA came down to 0.17% versus 0.48% a year ago. NPAs are those loans for which the borrower has defaulted on payments for the period given by the regulations. A reduction in NPAs usually reflects an improvement in the loan book. The bank also reported credit costs came down to 0.31%, aided by fresh slippages and provision coverage. The reduction in credit costs can help in improving the profitability as lesser earnings need to be provisioned for covering bad loans. The improvement in asset quality is a big factor driving the Federal Bank performance as it is a sign of the bank’s good management of credit risks apart from the growth in advances.

Federal Bank reported continued growth of lending and deposits in the second quarter of FY27. Total business grew 20.12% YoY to over ₹6.4 lakh crore. Advances rose 21.66% to ₹3.02 lakh crore while deposits were up 18.61% at ₹3.43 lakh crore. The bank’s CASA balances grew 22.56% to ₹1.10 lakh crore. Funds that are kept in current account or savings accounts provide cheaper sources of funding for the banks. The rise in deposits can support the ability of the banks to fund the growth in loans. A higher share of deposits in the form of CASA can also help cut costs of funding and help in protecting the profit margins.

Federal Bank Return Ratios

Federal Bank’s return ratios for the quarter improved with return on assets (RoA) at 1.32% and return on equity (RoE) at 13.57%. The RoA reflects how the bank is leveraging its assets to make profits while the RoE shows the profitability in terms of shareholders’ money. Capital adequacy of the bank stood at 16.84% as of September 2026. Capital adequacy indicates the capital of the bank relative to its risk-weighted assets. A good level of capital can help the bank meet growth in lending and also maintain the capital requirements.

Federal Bank Share Price Today

Shares of the bank gained during the day on the news of the results being released for the quarter. The share price of the bank closed at ₹338.00 on NSE at 3:30 PM as compared to the previous close of ₹335.00. This is an increase of 0.9%. On intraday basis, it has seen a low at ₹328.00 and a high of ₹344.80 during the day. However, the movement in the share’s price seems smaller to the report that the bank has reported in its profits for the quarter.

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