The Federal Bank (FEDERALBNK) investor relations material

Executive summary

• Q1 FY27 delivered record core earnings, with net profit of ₹1,177 Cr, up 37% YoY, and highest-ever net interest income of ₹2,946 Cr, driven by strong balance sheet growth and improved profitability metrics.

• Asset quality reached decadal best levels, with gross NPA at 1.52% and net NPA at 0.18%, and provision coverage ratio at 87.37%.

• Balance sheet expanded to ₹3.93 lakh Cr, up 11% YoY, with advances and deposits both growing 15% YoY; retail and wholesale portfolios contributed to diversified growth.

• Three significant developments: new Chairman appointed, acquisition of Standard Chartered India credit card portfolio underway, and receipt of S&P investment-grade international credit rating.

• Financial results were reviewed by joint statutory auditors, with unmodified review reports issued.

Financial highlights

• Net profit for Q1 was INR 1,176.93 crore, up 36.57% YoY; EPS at INR 19.15, up 36.06%; book value per share rose to ₹161.87.

• Net interest income rose to INR 2,945.89 crore, up 26.06% YoY; NIM at 3.33%, up 13 bps sequentially and 39 bps YoY.

• Total deposits reached INR 3,20,117.66 crore, up 11.37% YoY; CASA balances at INR 103,163.15 crore, up 18.26% YoY; CASA ratio improved 188 bps to 32.23%.

• Fee income was INR 957.21 crore, up 21.7% YoY; cost-income ratio improved to 52.5%, down 239 bps YoY; operating profit up 22% YoY to ₹1,897 Cr.

• Capital adequacy ratio under Basel III stood at 16.97% for Q1 FY27.

Outlook and guidance

• Guidance for mid-teens plus growth maintained, with a positive bias.

• NIM expected to improve by 5-6 bps per quarter, though not necessarily linear.

• ROA guidance of 3-4 bps improvement per quarter, with continued focus on fee and NIM growth.

• Credit cost expected at the lower end of the 50-60 bps guidance.

• Capital adequacy remains strong at 16.97% CRAR and 15.89% Tier-I, supporting future growth with no near-term capital requirement.