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Federal Bank reported sustained Q1FY27 with focus on balanced growth and gradual improvement in RoA

ICICIdirect Research 20 Jul 2026 DISCLAIMER

News: Federal Bank reported sustained Q1FY27 with focus on balanced growth and gradual improvement in RoA. Gross advances grew ~13.4% YoY (~3.6% QoQ), led by commercial banking, CV/CE, gold loans, cards and LAP, while deposits rose ~11.4% YoY (~2% QoQ), supported by avg CASA accretion (23% YoY). NIM expanded 13 bps QoQ to 3.33%, aided by lower funding cost, continued deposit repricing and an improving asset mix. Fee income remained healthy at ₹957 crore (+22% YoY), while cost-to-income ratio improved to 52.5% (vs 54.9% in Q1FY26), reflecting better operating leverage despite annual wage revision. Asset quality improved, with GNPA/NNPA at 1.52%/0.18% and credit cost moderating to 41 bps. Consequently, PAT grew 36.6% YoY to ₹1,177 crore, with RoA at 1.22%, supported by strong execution across the core franchise. 

View: Despite a healthy operating performance and improving execution across key business segments, we believe the recent run-up in the stock price largely factors in near-term positives, while incremental catalysts remain limited.

Impact: Neutral

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