The Federal Bank (FEDERALBNK) Q2 24/25 earnings summary

Executive summary

• Leadership transition completed with Mr. KVS Manian as MD&CEO, focusing on strategy refresh and growth opportunities.

• Achieved all-time highs in net interest income, operating profit, other income, fee income, and net profit for Q2 FY25, with net profit at ₹1,057 Cr, up 11% year-over-year and 5% sequentially.

• Board approved unaudited financial results for the quarter and half-year ended September 30, 2024, for both standalone and consolidated statements.

• Balance sheet crossed ₹3.35 Lakh Cr, with business size nearing ₹5 Lakh Cr and robust growth across retail, business banking, and wholesale segments.

• Asset quality remained strong, with GNPA at 2.09% and NNPA at 0.57%, both improving year-over-year and sequentially.

Financial highlights

• Net interest income rose 15.11% YoY to ₹2,367.23 Cr; other income reached a record ₹964 Cr, up 32% YoY.

• Operating profit grew 18% YoY to ₹1,565.36 Cr; EPS at 17.11 and book value per share at 126.86.

• Fee income hit a record ₹784 Cr, up 19% YoY and 20% sequentially.

• Standalone net profit for Q2 FY25 was ₹105,669 lakhs, up from ₹95,382 lakhs in Q2 FY24; half-year net profit at ₹206,622 lakhs, up from ₹180,756 lakhs YoY.

• Cost-to-income ratio at 53.01%, credit cost at 0.30%, and NIM at 3.12%.

Outlook and guidance

• Guidance for loan growth maintained at 16-18% for the year.

• ROA and ROE expected to remain around 1.8% and 13-13.5% respectively, subject to interest rate movements.

• Board approved fund-raising plans to support future growth and capital requirements.

• Focus on improving NIM and cost-to-income ratio through a mix of asset and liability strategies.

• Management highlights continued focus on digital transformation, expanding distribution, and maintaining robust asset quality.