Federal Bank Q4FY26 results: Profit ₹1,259 cr, NIM 3.74%

What Federal Bank reported for Q4FY26

Federal Bank reported its highest-ever quarterly profit for the quarter ended 31 March 2026 (Q4FY26), even as provisions rose on both a year-on-year and sequential basis. The Kochi-based private lender said profitability improved on stronger core earnings, supported by a sharp rise in net interest income and other income. The bank also highlighted that key return ratios improved during the quarter. Alongside the earnings, Federal Bank announced a dividend for FY2025-26.

Market participants weighed the improvement in margins and profit against the higher provisioning line. Shares of the bank were down about 0.4% as of 14:50 IST, according to the provided update.

Net profit and how it compared with estimates

In its disclosures, Federal Bank reported consolidated net profit of ₹1,259.1 crore for Q4FY26, compared with ₹1,030.2 crore in the prior corresponding period. In a separate stock exchange filing reference, standalone profit was also described as rising 22% year-on-year to ₹1,259 crore in the January-March quarter from ₹1,030 crore a year earlier. Bloomberg-compiled consensus estimates cited in the material pegged profit at ₹1,236 crore.

The bank said part of the quarter’s reported performance included one-off items. These included ₹456 crore of interest on an income tax refund and ₹115 crore of income tax provision reversal. Excluding these one-off gains, the bank’s net profit was stated at ₹1,145 crore, up 11.16% year-on-year.

Net interest income, other income, and operating costs

Federal Bank reported net interest income (NII) of ₹3,173 crore for Q4FY26, compared with ₹2,377 crore in the year-ago quarter, per the company disclosures in the provided text. It also stated that excluding the one-off gain, NII was ₹2,717 crore, up 14% year-on-year. The narrative in the material further pointed to a strong rise in other income supporting the quarter.

A separate quarterly results table in the provided material (all figures in ₹ crore) showed NII at ₹3,544.95 crore for the period labelled “Mar 26”, with non-interest income at ₹1,185.86 crore. The same table showed non-interest expense at ₹2,255.57 crore for the period. Taken together, the provided data sources point to strong revenue momentum but mixed comparability across datasets due to one-offs and reporting presentation.

Provisions rose sharply

Provisions were a key focus for the quarter. The results highlights and quarterly table in the provided material showed loan loss provisions at ₹761.67 crore for the period labelled “Mar 26”, with a 367.78% year-on-year increase. The same table showed provisions rising sharply sequentially as well.

Despite the jump in provisions, reported profitability remained strong in the quarter, supported by higher NII and the one-off items cited by the bank. Investors typically track whether higher provisions reflect stress in underlying portfolios or conservative recognition, but the provided material does not attribute the rise to any specific segment.

Margins: headline NIM 3.74%, adjusted NIM 3.20%

Net interest margin (NIM) was one of the most closely tracked metrics in the quarter. Federal Bank stated that NIM for Q4FY26 stood at 3.74%, up 56 basis points from the previous quarter and 62 basis points from the same period last year. Adjusting for one-offs, NIM was reported at 3.20%, up 2 basis points sequentially and 8 basis points year-on-year.

In a management commentary excerpt included in the material, the bank said it closed the quarter with a NIM of 3.2% excluding one-offs, and the “exit NIM” was also 3.2% on that basis. The same commentary said that including one-offs the NIM would be 3.74%. Management also referenced that NIM at the beginning of the year (year-on-year reference) was 3.12% and said the bank maintained its NIM despite a 125 basis points repo cut.

Deposits, CASA, and milestone on NR deposits

On the balance sheet, Federal Bank said total deposits rose 17% to ₹2.13 lakh crore, which is ₹2,13,000 crore. The bank also stated that CASA deposits and NRI deposits both crossed the ₹1 lakh crore milestone each, equivalent to ₹1,00,000 crore each. These milestones were positioned as an indicator of deposit franchise depth.

The provided text also contains older context on deposit growth in earlier quarters (such as Q4FY25), but the deposit milestone callout was specifically tied to the quarter ended 31 March 2026.

Asset quality and NPAs

Federal Bank said asset quality remained strong, with net NPA ratio at 0.2% for the quarter, improving sequentially from 0.42% in Q3FY26. When adjusted for one-offs, the net NPA ratio was stated at 0.37%. These numbers were presented alongside the margin and profit improvement in the provided disclosures.

The material does not provide gross NPA for Q4FY26. It also does not provide a detailed split of slippages or recoveries for the quarter, beyond the net NPA ratios and the note that asset quality improved sequentially.

Dividend and return ratios

Federal Bank said it declared a dividend of ₹1.20 per equity share (face value ₹2 each, 60%) for FY2025-26. It also reported full-year net profit of ₹4,117.32 crore.

On profitability ratios, the bank reported RoA of 1.36% and RoE of 13.69% for the quarter, alongside NIM of 3.74%. These metrics were presented as part of the bank’s performance summary for Q4FY26.

Key numbers at a glance

Why the Q4FY26 print matters for investors

For investors, the Q4FY26 update combined three key elements: a record quarterly profit, margin recovery to pre-rate cut levels, and a strong deposit franchise message. At the same time, the sharp rise in provisions and the inclusion of one-off items are important for interpreting underlying earnings momentum. The bank itself provided both reported and adjusted metrics, particularly on NIM and profit, which helps in separating core performance from one-time effects.

Management also reiterated margin guidance in the commentary excerpt, stating it was looking for a 5 to 6 basis points improvement in NIM over the next 3 to 4 quarters, while noting this was conditional on the rate environment.

Conclusion

Federal Bank’s Q4FY26 results showed higher profits, improved margins, and a stronger deposit base, alongside higher provisions and identifiable one-off income items. The bank also proposed a ₹1.20 dividend for FY2025-26 and reported improved net NPA ratios on a sequential basis. Investors will likely track follow-through on management’s stated NIM improvement guidance over the next few quarters and any further disclosures on provisioning trends.