CASA and NR Deposits Both Cross Rs1 Trillion Milestone; RoA and NIMs Reclaims Pre-Rate Cut Levels
FinTech BizNews Service
Mumbai, April 29, 2026: Federal Bank reported a robust and structurally strong performance for the
quarter ended 31 March 2026 (Q4 FY26). This was a strong operational quarter, moving
firmly in line with the strategic direction of the Bank. The period was characterized by
margin expansion, a surge in fee income, and asset quality reaching new historical
benchmarks.
Key Highlights – Q4 FY26
• Profitability: Net profit stood at Rs1,259.10 crore for the quarter, a sequential growth of
20.93% and, supported by stronger core earnings. The net profit for the financial year stands
at Rs4,117.32 crore.
• Liability Restructuring: The Bank successfully optimized its funding profile by focusing on
retail liabilities and deliberately reducing the volume of high-value deposits to lower the
overall Cost of Funds (5.46%).
• NR Franchise Milestone: Further strengthening its core moats, the NR deposit book
crossed the Rs1 lakh crore milestone, reaching Rs1,02,619.69 crore (up 7.04% QoQ).
• CASA Momentum: The CASA ratio improved to 32.94%, up 271 bps YoY.
• Asset Mix & Growth: The structural shift in the asset mix is yielding results, with strong
growth in desired segments like Commercial Banking (+5.92% QoQ) and Retail Banking
(+3.21% QoQ).
• Fee Income: The "Fee Story" remains a standout, with fee income reaching Rs990.92 crore,
up 10.54% QoQ.
• Asset Quality: GNPA and NNPA reached record lows of 1.62% and 0.20% respectively.
• Return Metrics: RoA reached 1.36% and NIM reached 3.74%, while RoE expanded to
13.69%.
• Wealth Management: The Bank successfully launched its wealth offering during the
quarter, marking a new chapter in its service offerings.
• Total Business reached Rs5,78,503.76 crore, registering 4.54% QoQ growth.
• Gross Advances rose to Rs2,68,369.03 crore, up 3.65% QoQ, led by Commercial Banking,
Retail, and the CV/CE segments.
• Total Deposits rose to Rs3,13,909.39 crore, up 5.41% QoQ, led by Resident and NR book.
• CASA balances grew to Rs1,03,390.30 crore, up 8.26% QoQ, crossing the Rs1 lakh crore
milestone.
• Operating Efficiency: Cost-to-Income ratio improved to 47.28%, a sequential reduction of
665 bps, reflecting strong operating leverage.
• Provision Coverage Ratio (excluding TWO) improved to 87.07%, up 1,193 bps sequentially
Leadership Comment
Commenting on the performance, Mr. KVS Manian, Managing Director & CEO, said: “Our Q4 performance represents a strong operational quarter that is fully aligned with our strategic roadmap. We have made significant progress in restructuring our liabilities by focusing on retail mobilization and reducing reliance on high-value deposits, which is reflected in our optimized cost of funds. Reaching the Rs1 lakh crore milestone in both CASA and NR deposits concurrently is a structural achievement that reinforces our funding moat. While shifting the asset mix is a medium-term journey, we are seeing the desired growth in our chosen segments. With our new in-house Wealth Platform now live and our RoA and NIMs returning to pre-rate cut levels, we are well-positioned for the next phase of our growth.” Strategic Network Expansion The Bank added 39 new branches during the quarter. This expansion and restructuring process has been elevated through a highly data driven approach, leveraging detailed studies by external experts. These insights are helping the Bank build a solid, data-driven branch network designed for maximum impact and efficiency. Asset Quality and Resilience Despite global geopolitical uncertainties, the Bank’s inherently balanced risk approach ensured that Gross NPA and Net NPA remained at decadal lows. The pivot towards selected segments continues to provide a meaningful buffer, positioning the Bank with greater resilience.
