The Federal Bank (FEDERALBNK) Q3 25/26 earnings summary

Executive summary

• Q3 delivered record net interest income of ₹2,653 crore, operating profit of ₹1,729 crore, and net profit of ₹1,041.21 crore, up 9% sequentially and year-over-year, reflecting strong growth across core banking and subsidiaries.

• Return on assets (ROA) at 1.15% and return on equity (ROE) at 11.68%, with EPS at ₹16.79 annualized.

• CASA ratio reached 32.07%, and balance sheet size grew to ₹3.67 lakh crore.

• Brand refresh and new branch design launched, with strategic investment approval from Blackstone reinforcing long-term growth and stakeholder confidence.

• The group includes two subsidiaries and one associate, with the associate's results included based on management-certified financials.

Financial highlights

• Net profit for Q3 was ₹1,041.21 crore, up 9% sequentially; total business reached ₹5,53,364.49 crore, up 3.71% QoQ and 11.4% YoY; deposits at ₹2,97,795.82 crore, up 3.07% QoQ and 11.8% YoY.

• Net interest income grew 9% year-over-year and 6% sequentially to ₹2,652.73 crore; fee income up 19% year-over-year to ₹896.47 crore.

• Operating profit increased 10% year-over-year to ₹1,729 crore; cost-to-income ratio improved to 53.92%.

• Gross advances rose 4.46% QoQ and 10.94% YoY; advances grew 9% YoY to ₹2,65,722 crore.

• CASA balances grew 6.59% QoQ and 18.86% YoY, with CASA ratio at 32.07%.

Outlook and guidance

• Margins expected to remain stable in the near term, with further improvement possible as liability and asset mix evolves.

• Credit cost guidance for FY remains at 50-55 bps, with further improvement expected as MFI credit costs decline.

• Loan growth targeted in high teens (~16%) for the next year, focusing on higher-yielding segments and digital transformation.

• ROA guidance unchanged from previous strategic plan, with continued execution focus.

• Strategic capital infusion from Blackstone to support future growth and financial flexibility.