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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