Federal Bank shares jumped more than 4% in early trade after the lender announced its September quarter (Q2FY26) results and revealed plans for a major fundraising initiative. As of 9:38 AM, the shares were trading 4.65% higher at Rs 222.26.
In its Q2FY26 performance, the bank reported a net profit of ₹955 crore, marking a 10% year-on-year (YoY) decline from ₹1,056 crore in the same quarter last year. The fall in profit was largely attributed to higher provisions, which rose sharply to ₹363 crore compared to ₹158 crore a year ago.
However, core operational metrics showed steady improvement. Net Interest Income (NII) grew 5% YoY to ₹2,495 crore, while Other Income rose 12% to ₹1,082 crore. Asset quality also improved, with the Gross NPA ratio easing to 1.83% from 1.91%, and Net NPA remaining stable at 0.48%. The bank's Return on Assets (RoA) stood at 0.27%, up 2 basis points sequentially.
Alongside its quarterly results, Federal Bank announced that its Board of Directors will meet on October 24, 2025, to consider fundraising options. The proposals under review include rights issues, preferential allotments, qualified institutional placements (QIPs), or other permissible routes. The capital raise could involve the issuance of equity shares, convertible instruments, or warrants, subject to regulatory approvals.
This strategic move aims to strengthen the bank's capital base and support future expansion plans, signaling management's focus on long-term growth and financial stability.
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