Federal Bank profit surges 45% in Q2 on strong deposit inflows

Federal Bank reported a sharp 45 per cent year-on-year jump in net profit for the second quarter of FY27, reaching ₹1,386 crore, signalling strong operational performance and improved asset quality. The private sector lender's earnings growth was underpinned by disciplined liability management and growing lending volumes across retail and corporate segments.

Net interest income, a key metric of lending profitability, expanded 26 per cent to ₹3,153 crore during the quarter. This expansion reflected improved spreads amid the Reserve Bank's rate-cut cycle and higher average advances deployed across the loan portfolio.

The bank mobilised $1.5 billion through FCNR(B) deposits, reinforcing its foreign exchange reserves and providing additional liquidity buffers. The external funding move underscores growing international investor confidence in Indian lenders and supports Federal Bank's expansion plans.

The strong Q2 performance positions Federal Bank favourably as it navigates evolving credit cycles and competitive pressures in the banking sector. The bank's deposit base and capital position provide headroom for sustained credit growth in coming quarters, analysts noted.