Federal Bank Q4 Profit Meets Target, NII Surges, Dividend Declared

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AuthorIshaan Verma|Published at:
Federal Bank Q4 Profit Meets Target, NII Surges, Dividend Declared
Overview

Federal Bank reported Q4 FY26 net profit of ₹1,259 crore, meeting analyst expectations. Net interest income surged 33% to ₹3,174 crore, and Net Interest Margin (NIM) improved to 3.74%. Despite a significant rise in provisions to ₹741 crore, the bank's board recommended a final dividend of ₹1.20 per share, signaling continued financial health.

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Federal Bank reported ₹1,259 crore in net profit for Q4 FY26, meeting market expectations. This performance was driven by a strong 33% rise in Net Interest Income (NII) to ₹3,174 crore. Net Interest Margin (NIM) improved to 3.74% from 3.12% a year earlier. Operating profit after tax rose significantly by 55.3%.

Asset Quality and Provisions

Despite strong revenue growth, the bank significantly increased provisions for bad loans and contingencies. Provisions jumped to ₹741 crore for the quarter, a sharp rise from ₹332 crore sequentially and ₹138 crore in the prior year. This increase may signal a more conservative approach to risk or the recognition of potential loan book stress.

Dividend Payout

However, the bank's board recommended a final dividend of ₹1.20 per equity share for FY26, pending shareholder approval. This payout, coupled with its profit performance, aims to reward shareholders. Asset quality saw improvement, with Gross Non-Performing Assets (GNPAs) decreasing slightly to 1.62% from 1.72% sequentially. Net Non-Performing Assets (NNPAs) improved to 0.2% from 0.4%.

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