Federal Bank is exploring investment opportunities across financial services, including the core banking and universal banking segments, as it continues to look for avenues for inorganic growth. However, the bank’s management refrained from commenting on the size of any potential investment, stating that nothing is currently on the table.
Speaking to ET NOW, Federal Bank said it had no comments on the possibility of acquiring Jana Small Finance Bank. The management reiterated that it is constantly evaluating inorganic growth opportunities.
Federal Bank reported its earnings for the July-September quarter of the 2026-27 financial year on Friday, posting a 45.1 per cent YoY surge in its standalone net profit to Rs 1,386.09 crore, marking the highest-ever quarterly profit in the Bank’s history.
In the corresponding period of the preceding fiscal year, the Bank had logged a profit of Rs 955.26 crore, according to a regulatory filing.
Its net interest income (NII) jumped 26.4 per cent YoY to Rs 3,153.40 crore during the quarter under review, compared with Rs 2,495.24 crore in the second quarter of the 2025-26 fiscal year, ahead of advances growth of 21.66 per cent.
The Federal Bank saw its net interest margin (NIM) expand by 26 basis points YoY to 3.32 per cent in Q2 FY27. Furthermore, its cost of deposits declined 39 bps YoY to 5.18 per cent, and its cost of funds fell 40 bps YoY.
UPI fees, IRDAI commission norms under review
On the potential impact of UPI fees, Federal Bank’s management said it was too early to comment, adding that the bank was still evaluating the implications.
The bank is also studying the Insurance Regulatory and Development Authority of India’s (IRDAI) commission fee norms to assess their potential impact on its business.
Federal Bank assesses expected credit loss norms
The management said the bank had assessed the impact of the expected credit loss (ECL) norms. However, it did not provide further details on the assessment.
The bank also said its loan book was not showing signs of stress due to El Nino, while adding that it was monitoring the situation closely.