Due to a 6.23 percent increase in its loan book and a 0.06 percent constriction in the net interest margin year over year at 3.06 percent, the core net interest income increased 5.4% to Rs 2,495 crore.
According to a senior bank official, the lender wants to increase the book by 10–12% in the second half of the fiscal year. This is higher than the 7.6% growth in the first half and will result in a credit growth of less than 10% in FY26, even if the top end of the target for the second half is achieved.
This will be less than FY25's 12.14 percent. The bank's other revenue increased by 12.26% to Rs 1,082 crore. Manian stated that the quarter's deposit increase was 7.36% and that the Federal Bank will be concentrating on growing the proportion of low-cost current and savings account balances in the future.
According to the bank management, the slippages are less than the Rs 658 crore from the previous quarter, and the slippage ratio has been kept below 1%. From 1.91 percent at the end of the previous quarter and 2.09 percent on an annual basis, the lender's gross non-performing assets ratio improved to 1.83 percent.
The bank's overall provisions increased from Rs 196.14 crore to Rs 397.44 crore over the previous year, which had the biggest negative impact on profit growth. Manian clarified that the provision statistics are not comparable because the bank changed its provision policy on the exposures to unsecured loans in the December quarter of last year.
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