Archive · 2 Aug 2025
Federal Bank Q1 Profit Down 15% Amidst Higher Loan Provisions
Federal Bank's profit went down by 15% in the last three months.
This happened because the bank had to set aside more money to cover potential loan losses, especially in agriculture-related microfinance.
While the bank earned more interest and other income, its expenses also increased.
Retail and commercial banking did well, but corporate lending wasn't as strong.
The bank expects to see some changes in interest rates and plans to earn more from fees to manage its income.
Federal Bank's net profit declined 15% year-on-year to Rs 861.75 crore in Q1.
The decline was attributed to increased operating expenses and higher provisions for bad loans.
Interest income increased, but interest expenses rose at a faster pace.
Provisions and contingencies surged due to stress in the agri microfinance loan book.
Retail and commercial banking drove growth, but corporate loan growth remained tepid.
- Who
- Federal Bank.
- What
- Federal Bank reported a 15% decline in net profit for the June quarter.
- When
- The report covers the June quarter (Q1).
- Where
- Federal Bank, a Kerala-based bank.
- Why
- The decline was due to higher operating expenses and provisions for bad loans, particularly in the agri microfinance sector.
- Net Profit (Q1)
- Rs 861.75 crore
- YoY Profit Decline
- 15%
- Interest Income Increase
- 6%
- Provisions & Contingencies
- Rs 400.16 crore
- Total Business Growth
- 9%
- Slippage Ratio
- 1.11%
- Net NPA
- 0.48%
- NIM
- 2.94%