April 29: Federal Bank announced a robust and structurally strong financial performance for the quarter ended March 31, 2026 (Q4 FY26), marked by strong profitability, improved asset quality, and key milestones across its deposit franchise.
The Bank reported a net profit of ₹1,259.10 crore for the quarter, reflecting a sequential growth of 20.93%, driven by stronger core earnings and operational efficiency. For the full financial year, net profit stood at ₹4,117.32 crore.
A significant highlight of the quarter was the Bank achieving a dual milestone, with both its CASA (Current Account Savings Account) balances and Non-Resident (NR) deposit book crossing the ₹1 lakh crore mark. CASA balances rose to ₹1,03,390.30 crore, registering an 8.26% QoQ growth, while the NR deposit book reached ₹1,02,619.69 crore, up 7.04% QoQ. The CASA ratio improved to 32.94%, up 271 basis points year-on-year.
The Bank continued to optimize its liability profile by focusing on retail deposits and reducing reliance on high-value deposits, bringing down the overall cost of funds to 5.46%.
On the asset side, the Bank reported steady growth in key segments, with Commercial Banking advancing by 5.92% QoQ and Retail Banking growing by 3.21% QoQ. Gross advances increased to ₹2,68,369.03 crore, while total deposits rose to ₹3,13,909.39 crore, contributing to a total business size of ₹5,78,503.76 crore, up 4.54% QoQ.
Fee income remained a strong contributor, rising to ₹990.92 crore, a growth of 10.54% QoQ, underlining the Bank’s diversified revenue streams.
Asset quality improved further, with Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) declining to historic lows of 1.62% and 0.20%, respectively. The Provision Coverage Ratio (excluding TWO) improved significantly to 87.07%.
Key return metrics also strengthened, with Return on Assets (RoA) at 1.36%, Net Interest Margin (NIM) at 3.74%, and Return on Equity (RoE) at 13.69%, indicating a return to pre-rate cut levels.
During the quarter, the Bank also launched its in-house wealth management platform, marking a strategic expansion into wealth services.
Commenting on the performance, KVS Manian, Managing Director & CEO of Federal Bank, said,
“Our Q4 performance represents a strong operational quarter aligned with our strategic roadmap. Achieving the ₹1 lakh crore milestone in both CASA and NR deposits reinforces our funding strength. With our asset mix transformation underway and key metrics improving, we are well-positioned for the next phase of growth.”
As part of its expansion strategy, the Bank added 39 new branches during the quarter, leveraging a data-driven approach to enhance network efficiency and reach.
Despite global uncertainties, the Bank maintained strong resilience through its balanced risk approach, ensuring asset quality remains at decadal lows while supporting sustainable growth.
