India · Delayed Price · Currency is INR The Federal Bank Earnings Call Transcripts
Fiscal Year 2026
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Reported record net profit and robust growth in key segments, with asset quality at all-time best and strong CASA momentum. Guidance remains positive for further growth, with focus on risk-adjusted profitability and continued branch expansion.
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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 deposit costs and CASA growth, while fee income rose 13% QOQ. Asset quality remains stable with credit cost at 50 bps, and MFI stress is easing but still monitored. CET1 stands at 15.71%, with capital plans pending board decision.
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Gross advances grew 9.15% YoY, led by commercial banking and credit cards, while CASA ratio improved to 30.35%. Asset quality remains stable outside MFI/agri, with NIM at 2.94% and ROA at 1%. Fee income and digital initiatives are driving future growth.
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 growth, with a shift to average CASA and fixed-rate lending. LCR improved to 133%, credit cost guidance held at 40–45 bps, and a one-time INR 292 crore NPA provision impacted profits. Unsecured lending growth remains cautious.
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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, stable asset quality, and a cost-to-income ratio targeted to improve. Deposit growth outpaced the industry, and leadership transition is underway.