Federal Bank has reported a strong financial performance for the first quarter of the financial year 2026-27, posting a 37 per cent year-on-year increase in net profit to ₹1,177 crore for the April–June quarter. The lender attributed the growth to higher net interest income (NII), improved net interest margins (NIM) and lower fresh loan slippages.
The bank’s net interest income rose 26 per cent year-on-year to ₹2,946 crore, supported by healthy growth in advances and stronger margins. However, on a sequential basis, both net profit and NII declined by 7 per cent compared to the previous quarter.
Federal Bank said that, excluding the one-time gain recorded in the March quarter, the latest earnings represent its highest-ever quarterly profit. The bank’s net interest margin expanded by 39 basis points year-on-year to 3.33 per cent, reflecting improved operational efficiency.
The improvement in margins was aided by a faster decline in the cost of funds compared with asset yields. The cost of funds fell by 60 basis points, while asset yields declined by 44 basis points. Meanwhile, the cost of deposits dropped by 57 basis points to 5.21 per cent.
The strong quarterly performance highlights Federal Bank’s continued focus on profitable growth, prudent risk management and operational efficiency. The results are expected to strengthen investor confidence as the bank continues to expand its lending portfolio while maintaining healthy financial fundamentals.
