Overview

• Federal Bank’s net profit fell 15% to Rs 862 crore in Q1, weighed down by a squeeze in net interest margin to 2.94% from 3.16% a year ago.
• The lender raised provisions to Rs 437 crore after reporting Rs 658 crore in fresh slippages, largely from its microfinance and seasonal agriculture portfolios.
• Other income reached an all-time high of Rs 1,113 crore, rising 22% on stronger fee income and treasury gains.
• Credit growth expanded 9% year-on-year, driven by a 30% jump in commercial lending and 16% growth in credit cards despite modest corporate demand.
• Microfinance slippages peaked in May and have eased in June and July, offering a potential reprieve for asset quality pressures.