Federal Bank, a private sector bank with a strong retail and NRI deposit franchise, reports its Q2 FY 2026-2027 results with the sector riding system-wide credit growth of about 18% YoY. The print will speak to whether the bank's guided NIM improvement of 5-6 bps per quarter stays on track despite the FCNR(B) deposit drag, and whether asset quality holds with credit cost at 41 bps against a 50-60 bps through-the-cycle target.
| Results date | October 16, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Previous quarter NII | Rs. 2,946 crore |
| Previous quarter PAT | Rs. 1,176.93 crore (standalone) |
| Market cap | Rs. 81,602.19 Cr |
| CMP | Rs. 330.0 |
The board was scheduled to meet on October 16, 2026 to consider unaudited standalone and consolidated results for the quarter and half-year ended September 30, 2026. The trading window was closed October 1-18, 2026.
The Q2 FY27 investor/analyst call was scheduled for October 16, 2026, at 3:30 PM IST.
The key question for Q2 FY27 is whether Federal Bank's guided average NIM improvement of 5-6 bps per quarter over the next 3-4 quarters stays intact, with management having explicitly cautioned that the path would be non-linear. The bank entered Q2 with NIM at 3.33% (up 39 bps YoY), RoA of 1.22%, and credit cost of 41 bps annualized against a 50-60 bps through-the-cycle target. Deposit repricing was expected to continue through Q1 and into early Q2 FY27, while the bank's active entry into leverage-linked FCNR deposits — with leverage kept at around 8-10 bps per the MD — adds a margin dynamic that analysts assess as mildly NIM-dilutive in the near term. On growth, Q1 advances rose 15% YoY with gold loans up 33%, cards up 36% and CV/CE up 21%, against management's mid-teens overall growth outlook and around 16% loan-growth expectation for the next year. Asset quality remains a strength, with GNPA at a record-low 1.52%, net NPA at 0.18% and provision coverage at 87.37%, though MFI stress — which management said was easing but not yet comfortable enough to revise credit-cost guidance — remains the flagged watch item. The upcoming call is also expected to cover the Standard Chartered India credit-card portfolio acquisition, guided to complete by year-end, and the ECL transition impact of 1.5-2% of net worth effective April 1, 2027.
NIM trajectory vs 5-6 bps quarterly guidance: The single most important metric for the quarter.
CASA ratio and deposit mix
Asset quality, credit cost and MFI
Performance vs Guidance Tracking
StanChart card portfolio, ECL transition and funding plans
Management has guided for average NIM improvement of 5-6 bps per quarter over the next 3-4 quarters, while cautioning that the quarterly path will be non-linear. Q1 FY27 NIM was 3.33%, up 39 bps YoY.
The CASA ratio stood at 32.23% in Q1 FY27, up 188 bps YoY from 30.35%. Asked whether the 36% target remained, the CEO said it was achievable "at some point" but did not give a deadline.
Management corrected analyst expectations to 55 bps for full-year FY26 and retained that guidance, citing MFI uncertainty. The bank's through-the-cycle credit-cost target is 50-60 bps, with Q1 FY27 credit cost at 41 bps annualized.
Management guided to around 16% loan growth for the next year and described overall growth as mid-teens, with potential positive bias if economic conditions and credit growth strengthen. Q1 FY27 net advances grew 15% YoY to Rs. 2,77,498 crore.