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Federal Bank Ltd

| Standalone Audited Financial Results for the Quarter and Year Ended March 31, 2026

Report Source

⬤29th Apr 26

Summary : Federal Bank reports increased profit, improved asset quality, and strong capital, but cash flows declined.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Interest expended (Standalone FY26: 17,03,797 Lakhs; Consolidated FY26: 17,77,156 Lakhs)
  2. Operating expenses (Standalone FY26: 7,89,160 Lakhs; Consolidated FY26: 8,66,664 Lakhs)
  3. Provisions and contingencies (Standalone FY26: 1,83,667 Lakhs; Consolidated FY26: 1,97,079 Lakhs)
  4. Interest earned (Standalone FY26: 27,69,538 Lakhs; Consolidated FY26: 29,67,410 Lakhs)
  5. Other income (Standalone FY26: 4,44,039 Lakhs; Consolidated FY26: 4,59,832 Lakhs)
  6. Standalone Net Cash Flow from Operating Activities decreased to 7,18,202 Lakhs (FY26) from 10,07,338 Lakhs (FY25).
  7. Standalone Net Cash Used in Investing Activities increased to (11,05,540) Lakhs (FY26) from (3,74,378) Lakhs (FY25).
  8. Standalone Net Cash Flow from Financing Activities shifted to outflow of (1,24,912) Lakhs (FY26) from inflow of 5,57,100 Lakhs (FY25).
  9. Consolidated Net Cash Flow from Operating Activities decreased to 4,34,911 Lakhs (FY26) from 8,80,092 Lakhs (FY25).
  10. Consolidated Net Cash Used in Investing Activities increased to (11,10,904) Lakhs (FY26) from (3,79,430) Lakhs (FY25).
  11. Consolidated Net Cash Flow from Financing Activities decreased to 2,06,926 Lakhs (FY26) from 7,40,097 Lakhs (FY25).
  12. Overall cash and cash equivalents decreased significantly for both standalone and consolidated.
  13. Floating provision of Rs. 45,596.00 Lakhs for Non-Performing Assets.
  14. Standalone Deposits increased to 3,13,90,939 Lakhs (FY26) from 2,83,64,747 Lakhs (FY25).
  15. Standalone Advances increased to 2,64,59,437 Lakhs (FY26) from 2,34,83,639 Lakhs (FY25).
  16. Consolidated Deposits increased to 3,13,49,089 Lakhs (FY26) from 2,83,48,362 Lakhs (FY25).
  17. Consolidated Advances increased to 2,77,38,066 Lakhs (FY26) from 2,44,99,536 Lakhs (FY25).
  18. Standalone Reserves and Surplus increased to 36,66,308 Lakhs (FY26) from 32,92,945 Lakhs (FY25).
  19. Consolidated Reserves and Surplus increased to 38,00,102 Lakhs (FY26) from 34,04,716 Lakhs (FY25).
  20. Acquisition of 30% shareholding in Ageas Federal Life Insurance Company Limited (associate).
  21. Both standalone and consolidated results show increased net profit and EPS for FY26 compared to FY25.
  22. Consolidated results include two subsidiaries (Fedbank Financial Services Limited, Federal Operations and Services Limited) and one associate (Ageas Federal Life Insurance Company Limited).
  23. Cash flow trends are similar for both standalone and consolidated, showing decreased operating cash flow and increased outflows from investing and financing activities.

Corporate Overview

  1. Primarily domestic operations in India.
  2. Managing accounts under resolution plans for COVID-19 related stress
  3. Some accounts from resolution plans slipped into NPA
  4. Increased cash outflows from investing and financing activities
  5. RBI guidelines and regulations
  6. SEBI Listing Obligations and Disclosure Requirements Regulations
  7. Banking operations including Treasury, Corporate/Wholesale Banking, Retail Banking (Digital and Other Retail Banking).
  8. Factual and compliant, reporting on financial results and regulatory adherence.
  9. Retail customers
  10. Corporate and wholesale clients
  11. Agriculture and business loan borrowers (co-lending)
  12. Treasury
  13. Corporate/Wholesale Banking
  14. Retail Banking (Digital Banking, Other Retail Banking)
  15. Other Banking Operations
  16. Growth in deposits and advances indicates expanding operations.
  17. Allotment of warrants for capital infusion (Rs. 1,54,912.77 Lakhs)
  18. Acquisition of 30% shareholding in Ageas Federal Life Insurance Company Limited
  19. Ongoing projects under implementation (Rs. 2,67,063.28 Lakhs outstanding)

Risk Factors

  1. Operating cash flow experienced a decline.
  2. Increased cash outflow from investing activities.
  3. Stressed accounts under resolution plans.
  4. Co-lending portfolio has non-performing loans.

Key Drivers

  1. Net profit and EPS show growth.
  2. Asset quality significantly improved (NPA reduction).
  3. Capital adequacy ratio remains strong.
  4. Deposits and advances continue to grow.

Auditor’s Report

  1. Unmodified opinion on Standalone Financial Results for the year ended March 31, 2026.
  2. Unmodified opinion on Consolidated Financial Results for the year ended March 31, 2026.
  3. Reliance on reports of other auditors for subsidiaries and associate in consolidated financial statements.
  4. Actuarial valuation of liabilities for life policies in Ageas Federal Life Insurance Company Limited.
  5. Disclosures relating to Pillar 3 (leverage ratio, liquidity coverage ratio, net stable funding ratio) under Basel III Capital Regulations were not audited.

Board Commentary

  1. Recommended final dividend of Rs. 1.20 per equity share (60%) for FY 2025-26, subject to shareholder approval.
  2. Exposure to accounts classified as Standard due to COVID-19 resolution plans, with some slipping into NPA
  3. Non-performing loans identified in co-lending arrangements
  4. Compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
  5. Compliance with Banking Regulation Act, 1949 and RBI guidelines
  6. Unmodified audit opinion on financial results
  7. Allotment of warrants to Asia II Topco XIII Pte. Ltd. for Rs. 1,54,912.77 Lakhs for capital infusion
  8. Acquisition of 30% shareholding in Ageas Federal Life Insurance Company Limited for Rs. 9,744.00 Lakhs
  9. Projects under implementation with Rs. 2,67,063.28 Lakhs outstanding

Corporate Governance

  1. Audit Committee reviewed and recommended financial results to the Board.

Management Discussion & Analysis

Future Strategy

  1. Adherence to regulatory guidelines and accounting standards
  2. Continuous improvement in internal transfer pricing methodology

Operational Focus Areas

  1. Compliance with RBI and SEBI regulations
  2. Effective management of stressed assets and resolution plans
  3. Monitoring co-lending arrangements and associated risks

Performance Drivers

  1. Increased Net Profit and Earnings Per Share (EPS)
  2. Improved asset quality with reduction in Gross and Net NPA percentages
  3. Strong Capital Adequacy Ratio (Basel III)
  4. Growth in deposits and advances across segments
  5. Improved operating margin

Risk Control Measures

  1. Making floating provisions for Non-Performing Assets
  2. Adherence to regulatory frameworks for asset classification and provisioning

Critical Risks

  1. Accounts under resolution plans for COVID-19 related stress, with some slipping into NPA
  2. Non-performing loans within co-lending arrangements
  3. Significant decrease in overall cash and cash equivalents