Federal Bank Q4 results: Net profit up 14% to ₹1,030 cr, NIM at 3.12%

Federal Bank reported a 14 per cent year-on-year (YoY) rise in net profit to Rs 1,030 crore in the January–March quarter of FY25 (Q4FY25), up from Rs 906 crore in the same period last year, aided by healthy growth in other income and fee income.

 

Net interest income — the difference between interest earned and interest expended — grew by 8 per cent YoY to Rs 2,377 crore during the quarter. Net interest margin (NIM) for Q4FY25 stood at 3.12 per cent, compared to 3.11 per cent in the previous quarter.

 

“… on NIM, there are multiple factors at play. No denying that there will be downward pressure if significant rate cuts happen over the year. We will have to take measures on the asset side and we will have to decide to manage,” K V S Manian, managing director and chief executive officer, Federal Bank, said in a post-earnings media call.

 

Sequentially, the profit was up by 8 per cent from Rs 955 crore in Q3FY25.

 

Provisions of the bank increased by 113 per cent YoY in Q4FY25 to Rs 435 crore, up from Rs 204 crore last year, as slippages were higher in Q4FY25 compared to the same period last year.

 

However, provisions dropped 29 per cent sequentially from Rs 614 crore in Q3FY25, as slippages were lower sequentially.

 

The asset quality of the lender was stable, with the gross non-performing assets ratio (GNPA) at 1.84 per cent as of March 31, 2025, compared to 1.95 per cent in the previous quarter (Q3FY25). The net NPA ratio was down to 0.44 per cent as of March 31, 2025, from 0.49 per cent as of December 31, 2024.

 

Gross slippages for Q4FY25 stood at Rs 483 crore, compared to Rs 486 crore in Q3FY25. Of the fresh slippages, Rs 226 crore was from retail and Rs 171 crore from agriculture assets.

 

The bank reported net advances growth of 12.15 per cent YoY to Rs 2.34 trillion, while deposits grew by 12.32 per cent to Rs 2.83 trillion.

 

“We have already stated that our credit growth will be in the range of 1.2 to 1.5 times the nominal growth rate, and that is where it continues to remain. We are reasonably confident that we will be able to achieve that kind of growth rate,” Manian said.

 

“Currently, this is not the environment where we want to press the pedal on very high-yielding products. But having said that, in this quarter itself, our credit card has seen traction. We intend to build some traction on the personal loan side, which we have not done till now in the year. But we see the rate environment getting better to accelerate that, and our medium-yielding products did improve. We also intend to add used commercial vehicle proportion. Similarly, on the car side, we are also looking at increasing the proportion of used cars. There are multiple levers that we are going to use within our risk-return framework that we are comfortable with,” Manian added.