Federal Bank Q2 Results October 16, 2026: Record Profit of ₹1,386 Crore, Up 45%

Federal Bank Q2 results landed on October 16 with the Kerala lender posting its highest quarterly profit yet. Net profit for the quarter ended September 30, 2026 (Q2 FY27) jumped 45.10% year-on-year to ₹1,386.09 crore. Gross and net bad-loan ratios also slipped to their lowest in a decade, as per the bank’s press release filed with NSE and BSE. The filing went out at 1:31 PM IST on Friday, so Dalal Street saw the numbers while still trading. For the broader tape, check our stock market today India hub.

Federal Bank Q2 results: the numbers that matter

Everything below is from the bank’s exchange filing. Growth rates are Q2 FY27 versus Q2 FY26 unless we say otherwise.

• Net profit: ₹1,386.09 crore, up 45.10% year-on-year and 17.77% from the previous quarter. Earnings per share rose 44.34% to ₹22.26.
• Net interest income (NII): ₹3,153.40 crore, up 26.38%, ahead of the 21.66% growth in gross advances.
• Net interest margin (NIM): 3.32%, up 26 basis points year-on-year. The cost of deposits fell 39 basis points to 5.18%.
• Operating profit: ₹2,225.37 crore, up 35.35%.
• Other income: a record ₹1,490.44 crore, up 37.73%, including fee income of ₹1,167.71 crore, up 31.86%.
• Asset quality: gross NPA of 1.32% and net NPA of 0.17%, better by 51 and 31 basis points year-on-year. The provision coverage ratio, excluding technical write-offs, rose to 86.78%.
• Returns and capital: return on assets of 1.32% and return on equity of 13.57%. The capital adequacy ratio (CRAR) stood at 16.84%, with Tier I capital at 15.76%.

Where deposits and loans actually grew

Total deposits rose 18.61% to ₹3,42,693.56 crore. Gross advances crossed ₹3 lakh crore and finished at ₹3,01,687.80 crore. Low-cost current and savings account (CASA) balances grew 22.56% to ₹1,09,803.15 crore — faster than overall deposits — and that lifted the CASA ratio by 103 basis points to 32.04%. Non-resident money kept pouring in too: NRE and ONR deposits rose 26.63%, while FCNR(B) foreign-currency deposits surged 239.14% to ₹23,547.72 crore.

On the asset side, higher-yielding books did the heavy lifting. Gold loans grew 37.13%, loans against property 32.21%, credit cards 28.27%, commercial banking 25.46%, and commercial vehicle and construction equipment loans 21.74%. Corporate and institutional banking was slower, up 17.19% to ₹1,04,666.02 crore. Fresh slippages — loans that newly turned bad — fell 27.48% year-on-year, and the slippage ratio improved to 0.59% from 0.94%.

Did the print beat Street estimates?

The Financial Express said profit beat a Bloomberg estimate of ₹1,270 crore, and NII beat the ₹3,091 crore estimate. It also noted the margin was largely stable versus the 3.33% printed in the June quarter. MD and CEO KVS Manian told the paper that FCNR(B) deposits would have some effect on margins, but the bank was confident of keeping its margin trajectory. Management put the one-time hit from moving to the proposed expected credit loss (ECL) provisioning framework at 1.5% to 2% of net worth, and said floating provisions already on the books could cushion the transition.

CNBC-TV18 reported that provisions rose to ₹342 crore from ₹318 crore in the previous quarter but were lower than ₹363 crore a year earlier, and that gross NPA improved from 1.52% in the June quarter.

How the stock reacted, and our take

Federal Bank closed at ₹338.00 on the NSE on Friday, up ₹3.00 or 0.90% from ₹335.00, after trading between ₹328.00 and ₹344.80, as per the NSE bhavcopy for October 16.

We see a quarter that pairs strong core growth with cleaner books: NII outpaced loan growth, fee income hit a record, and bad-loan ratios kept falling. The watch-points from here are whether margins hold as costlier foreign-currency deposits get deployed, and how the ECL transition shows up in provisions. Our bank stocks to watch for October 16 preview flagged what the market wanted from this print, and our guide on how to analyse quarterly results of a company walks through how to read these lines.

This article is a news summary for information only and is not investment advice. Please consult a SEBI-registered adviser before making investment decisions.