Federal Bank profit up 10% QoQ, Net Interest Income surges to record

The Federal Bank on Saturday reported a 9.6 per cent decline in its second-quarter profit to ₹955 crore, down from ₹1,057 crore in the same period last year. On a sequential basis, however, profit rose 10 per cent from ₹861 crore in Q1 2025.

The profit was weighed down by a 129 per cent jump in provisions, which increased to ₹363 crore from ₹158 crore in the same period last year. Provisions are funds set aside by banks to cover potential losses from bad loans or other risks.

Despite the dip in net profit, the Aluva-based lender said its Net Interest Income (NII) climbed to a record ₹2,495 crore, a growth of 5.4 per cent.

Federal Bank’s operating profit for the quarter rose to ₹1,644 crore, up from ₹1,565 crore in the same quarter last year. The lender also reported a 3.7 per cent growth in total income, which reached ₹7,824 crore.

The bank also reported that its net advances rose from ₹2.3 lakh crore in Q2 of 2024 to ₹2.4 lakh crore in the current quarter, reflecting a year-on-year growth of 6.23 per cent. Total deposits increased from ₹2.7 lakh crore to ₹2.9 lakh crore as of 30th September 2025, registering a growth of 7.36 per cent.

Managing director and chief executive K V S Manian said that demand for corporate loans, which form a sizable chunk because of the high number, is still weak and hoped that the increase in consumer demand due to measures like the GST cuts by the government prompts corporates to initiate capacity additions. 

He added that retail will be the focus area from a loan growth perspective for the bank. However, Manian also said that the bank will be cautious on the microfinance loans and personal loans segment. Mainan highlighted plans to increase the share of the low-cost current and savings account balances going forward.