Federal Bank Q4 Profit Rises by 14%, Asset Quality Improves

Federal Bank has reported a strong performance for the fourth quarter of the fiscal year 2024-25, with net profit seeing a notable increase and key asset quality indicators showing improvement. 

Profit and Net Interest Income Performance

Federal Bank posted a net profit of ₹1,030.23 crore, marking a growth of 13.67% compared to ₹906.30 crore in the corresponding quarter of FY24. The Net Interest Income (NII) for Q4 FY25 stood at ₹2,377.4 crore. This represents an 8.3% increase from ₹2,195.2 crore recorded a year earlier. 

Improving Asset Quality

Gross Non-Performing Assets (NPA) decreased to ₹4,375.5 crore at the end of Q4 FY25, down from ₹4,553.3 crore in the previous quarter. As a percentage of Gross Advances, the Gross NPA ratio fell to 1.84% from 1.95% QoQ. Similarly, Net NPA declined sequentially to ₹1,040.4 crore from ₹1,131.2 crore. This resulted in the Net NPA ratio improving to 0.44% as of March 31, 2025, down from 0.49% in the preceding quarter. The bank's Provision Coverage Ratio, excluding Technical Write Off, stood at 75.37%.

Balance Sheet Expansion

The Net advances increased from ₹2,09,403.34 crore as on March 31, 2024, to ₹2,34,836.39 crore on March 31, 2025. This reflects growth across various segments. Retail Advances grew by 14.50% to reach ₹77,212.16 crore, while Business Banking advances increased by 11.44% to ₹19,064.36 crore. Commercial Banking saw significant growth at 26.76% to ₹27199 crore. Corporate Advances registered an 8.39% growth to reach ₹79,773.79 crore. Specific segments like CV/CE advances grew by 34.93% to ₹4644 crore, and Gold loans including ADLG registered a growth of 20.93% to ₹30,505 crore.

Dividend Recommendation and Strategic Milestones

The Federal Bank's board has recommended a final dividend of ₹1.20 per equity share of face value ₹2 each (60 percent) for the financial year 2024-25. This is subject to shareholder approval at the upcoming Annual General Meeting.

Market Performance

At Market Closing, the shares of the company fell by 3.57% and closed at ₹196.15.

Conclusion

The bank reported a strong quarter, marking a transformative year with strategic initiatives delivering measurable results. Key highlights include 35% YoY (27% QoQ) growth in current account balances and a 19% rise in mid-yield segments. Despite NIM pressures amid a rate cut environment, the bank maintained stability through strategic asset pricing and robust CASA growth. It also achieved its best asset quality in over a decade and crossed significant milestones- ₹5 lakh crore in total business and ₹4,000 crore in annual net profit.

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