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Federal Bank reported its highest ever standalone quarterly net profit at ₹1,386 crore in the second quarter Q2FY27, up 45 per cent year-on-year (y-o-y), on the back of a strong increase in net interest income and other income and a decline in provisions.

The private sector bank had reported a net profit of ₹955 crore in the year-ago quarter.

KVS Manian, MD & CEO, said, “We had a very strong quarter underpinned by sustained momentum on the liability side, disciplined growth on the asset side and continued focus on fees as well as operating efficiency.”

Net interest income (interest income less interest expended) rose 26 per cent y-o-y to ₹3,153 crore ( ₹2,495 crore in Q2FY26).

Other income, including fees earned from providing services to customers, commission from non-fund-based banking activities, earnings from forex and derivative transactions, selling third-party products, profit/loss on sale of investments, and recoveries from advances written off, among others, was up 38 per cent y-o-y at ₹1,490 crore (₹ 1,082 crore).

Total provisions, including towards loan loss, investment loss, standard assets and other purposes, declined 6 per cent y-o-y to ₹ 342 crore (₹ 363 crore).

Gross non-performing assets (NPAs) position improved to 1.32 per cent of gross advances as of September-end 2026 from 1.83 per cent as of September-end 2025. Net NPAs position too to 0.17 per cent of net advances from 0.48 per cent.

Venkatraman V, Executive Director, said, ”This is the highest quarterly profit in the bank’s history, and that too it came in the second quarter. Usually, banks report higher quarterly profit in Q4, but this time in Q2 we have seen the highest profit ever for the bank…GNPAs and NNPAs are both at decadal lows.”

Net interest margin (NIM) improved to 3.32 per cent in Q2FY27 from 3.06 per cent in Q2FY26. “Over the year our cost of funds fell faster (by 40 bps) than the lending yields (by 29 bps). It is this difference which also helped us widen the margins. So both on the liability and asset side is helping us improve our margins,” he said.

As of September-end 2026, deposits and advances increased by 18.61 per cent y-o-y (to stand at ₹3,42,694 crore) and 19.93 per cent y-o-y ( ₹3,00,875 crore), respectively.

Share of the bank closed at ₹337 apiece, up 0.60 per cent on BSE.

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