India · Delayed Price · Currency is INR The Federal Bank Earnings Call Transcripts
Fiscal Year 2026
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Record quarterly net profit and robust growth in key segments were achieved, with CASA and NRI deposits surpassing INR 1 lakh crore. Asset quality and profitability metrics reached all-time bests, while guidance remains positive for further growth and stable credit costs.
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Q3 delivered strong profit growth, margin expansion, and improved asset quality, supported by a robust CASA mix and disciplined execution. Strategic moves included a brand refresh, Blackstone investment approval, and increased insurance stake, with high-teens loan growth targeted ahead.
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NIM improved to 3.06% driven by lower funding costs and CASA growth, while fee income rose 13% QoQ. Asset quality is stable with credit cost at 50 bps, though MFI stress persists. Capital ratios remain strong, and further NIM and fee income gains are expected.
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Loan growth was led by commercial banking and gold loans, with stable asset quality outside the MFI Agri segment, where stress peaked but is now moderating. NIMs are expected to bottom out in Q2, with fee income and CASA showing strong momentum. ROA is expected to sustain or improve.
Fiscal Year 2025
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Total business surpassed INR 518,000 crore and net profit exceeded INR 4,000 crore, with strong fee income and best-in-decade asset quality. Growth in mid-yield and unsecured segments is prioritized, while NIM and cost ratios are managed amid a challenging rate environment.
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Strategic reorientation prioritized quality and sustainability, with a shift to average CASA metrics and accelerated provisioning impacting short-term profits. Asset growth focused on medium-yield segments, while credit cost guidance remains at 40-45 bps. LCR improved to 133%.
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Net profit rose 10.79% YoY to INR 1,057 crore, with strong deposit and advance growth, improved asset quality, and stable margins. Leadership transition is complete, and guidance for loan growth and profitability is maintained, with a focus on NIM and cost efficiency.
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Record quarterly net profit and operating profit were achieved, with robust credit and deposit growth outpacing the industry. Cost-income ratio improvement, stable asset quality, and a clear succession plan support a positive outlook for FY25.