The surge in bottom line was driven by higher core income, stable margins, and continued operating leverage, as the lender maintained its momentum across key verticals.
The bank’s Net Interest Income (NII), a key measure of a bank’s income from core lending operations, came in at Rs 2,652.73 crore, reflecting a 9.11% YoY increase and 6.31% QoQ growth. This also marked an all-time high for the bank’s NII. The increase was attributed to robust growth in advances and an improvement in funding efficiency.
Post the release of the Q3 results, Federal Bank shares soared 11.6% to hit its new 52-week high of Rs 273 on the BSE.
Net Interest Margin (NIM) for the quarter stood at 3.18%, expanding by 12 basis points QoQ and 7 basis points YoY. The improvement in margins was supported by a favourable liability mix and asset repricing benefits, according to the bank.
Further, the Operating Profit rose to Rs 1,729.33 crore, up 10.19% YoY and 5.18% QoQ, reflecting the strength of core earnings and the bank’s focus on cost control. Fee income also rose significantly, increasing 18.57% YoY to Rs 896.47 crore, underlining the bank’s growing non-interest income streams and improved customer engagement.
The bank’s total business (advances + deposits) expanded to Rs 5,53,364.49 crore, registering a growth of 11.40% YoY and 3.71% QoQ. Within this, advances stood at Rs 2,55,568.67 crore, up 10.94% YoY and 4.46% QoQ.Deposits rose to Rs 2,97,795.82 crore, up 11.80% YoY and 3.07% QoQ.
The CASA ratio, a key indicator of low-cost deposit base, stood at 32.07%, improving by 106 bps sequentially and 191 bps on an annual basis. CASA balances also showed strong growth of 18.86% YoY, aiding in maintaining cost efficiencies.
On the asset quality front, the bank reported significant improvement, with Gross NPA (GNPA) at 1.72%, down 11 bps QoQ and 23 bps YoY, marking a decadal low. Net NPA (NNPA) stood at 0.42%, also falling by 6 bps QoQ and 7 bps YoY, reflecting improved credit monitoring and disciplined underwriting. The Provision Coverage Ratio (PCR), excluding technical write-offs, improved to 75.14%, further strengthening the bank’s balance sheet resilience.
Also read: Yes Bank shares jump 3% ahead of Q3 results tomorrow. Here’s what investors can expect
In terms of shareholder returns, Return on Assets (ROA) improved to 1.15%, while Return on Equity (ROE) stood at 11.68% for the quarter. Earnings Per Share (EPS) for Q3FY26 was reported at Rs 16.79, up 8.89% QoQ, indicating improved earnings potential per share.
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