Bank stock skyrockets 10% after reporting 18% YoY increase in net profits

Synopsis: In Q3FY26, largest private bank of Kerala posted 18 percent YoY profit growth, driven by 9 percent YoY Net Interest Income growth, 12 bps Net Interest Margin expansion to 3.18 percent, stronger CASA at 32.07 percent, higher fee income, and improved cost efficiency.

Kerala’s largest private sector bank has announced its Q3FY26 result, where the bank has witnessed a 18 percent YoY and 10 percent QoQ profit growth. As of the latest quarter, the bank has seen a 3.2 percent growth in its number of Banking outlets and a 2 percent growth in its number of ATMs. 

With a market cap of Rs 66,075 Cr, Federal Bank Ltd saw its stock hit an intraday high of Rs 273 which is 10.5 percent higher than the previous close of Rs 247.  The stock has given a compounded return of 30 percent in the last 5 years while the 3 year number is at 25 percent.

The Q3FY26 Result

Federal Bank Ltd announced that the company in Q3FY26 it has delivered a strong operational and financial performance, with a revenue of Rs 7360 Cr in Q3FY26 the company witnessed a 1.9 percent QoQ rise from Rs 7216 Cr of Q2FY26 and 1.3 percent YoY rise from Q3FY25’s Rs. 7264 Cr. 

Talking about profits, the company saw a 10 percent QoQ growth from Rs 1019 Cr of Q2FY26 to Rs 1123 Cr of Q3FY26, and a 18 percent YoY growth from Q3FY25’s Rs. 948 Cr.

The company’s 9MFY26 revenue has grown by 5 percent from Rs. 23874 Cr of Q3FY25 to Q3FY26’s Rs 25139 Cr. In the bottom line 9MFY26 net profits fell slightly around 0.1 percent from Rs 3093 Cr in 9MFY25 to Rs 3090 Cr in 9MFY26.

Key Highlights 

The bank delivered a strong quarterly performance, with Net Interest Income rising to Rs 2,652.73 crore, up 6.31 percent QoQ and 9.11 percent YoY, supported by a 12 bps QoQ expansion in Net Interest Margin (NIM) to 3.18 percent due to improved liability mix and asset repricing. 

Funding costs declined further, with cost of deposits at 5.48 percent and overall cost of funds at 5.50 percent. Advances grew 10.94 percent YoY to Rs 2.56 lakh crore, led by Commercial Banking and Corporate & Institutional Banking, while deposits rose 11.80 percent YoY to Rs 2.98 lakh crore. 

The CASA ratio improved to 32.07 percent, enhancing margins. Asset quality strengthened with Gross NPA at 1.72 percent and Net NPA at 0.42 percent, while profitability improved with ROA at 1.15 percent and ROE at 11.68 percent. As of the latest quarter the bank saw its Total business standing at Rs 5,53,364.49 crore, registering 3.71 percent QoQ and 11.40 percent YoY growth.

The Federal Bank Limited, incorporated in 1931 as Travancore Federal Bank Limited, is a leading Indian private sector bank offering a wide range of banking and financial services. The bank provides retail and corporate banking solutions, along with para-banking services such as debit cards, third-party product distribution, treasury operations, and foreign exchange business. 

Headquartered in Kerala, Federal Bank is the largest private sector bank in Kerala, with a strong presence across India and has a growing international footprint. As of December 2025, the bank has 2094 ATMs and 1601 banking outlets.

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