The Federal Bank (FEDERALBNK) Q3 24/25 earnings summary

Executive summary

• Completed first full quarter under new MD & CEO, focusing on strategic reorientation, quality-first approach, and sustainable franchise building.

• Achieved all-time high net interest income of ₹2,431 cr and operating profit of ₹1,569 cr in Q3 FY25, with robust asset quality and decadal best GNPA at 1.95% and NNPA at 0.49%.

• ROA at 1.14% and ROE at 12.00% reflect sustained profitability, despite a 10% sequential decline in net profit to ₹955 cr due to higher provisions.

• Unaudited financial results for the quarter and nine months ended December 31, 2024, were reviewed and approved by the Board on January 27, 2025.

• Accelerated provisioning for retail unsecured loans and schematic advances, impacting short-term profitability but strengthening long-term resilience.

Financial highlights

• Average CASA grew 2.3% quarter-on-quarter and 11% YoY; SA averages up 2.5%, CA averages up 1%.

• Total deposits declined from INR 266,563 crores to INR 264,829 crores, mainly due to strategic reduction in wholesale and top 20 depositor concentration.

• Net interest income grew 15% YoY and 3% sequentially; total income up 17% YoY.

• Standalone net profit for Q3 FY25 was ₹95,544 lakhs, up from ₹100,674 lakhs in Q3 FY24; nine-month net profit was ₹302,166 lakhs, up from ₹281,430 lakhs YoY.

• LCR improved from 111% to 133% at quarter end.

Outlook and guidance

• Targeting loan growth at 1.5x system growth over the medium term, balancing reorientation and growth.

• Credit cost guidance maintained at 40-45 bps for the full year and expected to remain in this range going forward.

• Focus remains on sustainable growth, prudent risk management, and digital transformation.

• Implementation of new RBI investment portfolio guidelines from April 1, 2024, led to a one-time increase in reserves; future income and profit from investments are not comparable to prior periods.