Federal Bank Share Price Dips 5% After Q1 Results: Here’s What the Numbers Say

Market Performance

Federal Bank share price slipped sharply by 5%, touching ₹185 on August 4, following the announcement of its Q1FY26 financial results.

The decline came after the bank reported a significant dip in quarterly earnings, with higher provisions and credit costs weighing on investor sentiment.

Main News

Federal Bank’s Q1 profit came under pressure due to multiple factors, including:

• A sharp rise in credit costs
• Higher provisions, especially in microfinance and agri segments
• An increase in slippages across key lending portfolios

Despite these challenges, the lender showed signs of resilience in asset quality improvement.

Company Financials

Revenue (Net Interest Income)

• ₹2,336.8 crore in Q1FY26
• Up 2% YoY, reflecting steady core income growth

Net Profit

• Stood at ₹861.8 crore
• Down 14.6% YoY, reflecting pressure from rising provisions

Provisions

• Jumped 177% YoY
• Largely driven by stress in agri and microfinance loans

Credit Costs

• Rose by 38 basis points sequentially
• Reached 65 basis points in Q1FY26

Slippages

• Agriculture loan slippages surged to ₹270 crore, up from ₹71 crore in the previous quarter
• Business banking slippages also climbed 24% QoQ to ₹77 crore

Asset Quality Update

Despite higher stress in some segments, asset quality showed improvement:

• Gross NPA ratio improved to 1.91% from 2.11%
• Net NPA ratio declined to 0.48% from 0.60%

This improvement in NPA ratios reflects the bank’s ongoing efforts in managing loan quality amid sectoral challenges.

Company Overview

Federal Bank remains a prominent player in India’s banking sector, with a diverse loan portfolio and a growing retail presence. The bank continues to navigate sectoral stress while maintaining a focus on core operational metrics such as net interest income and asset quality.

Summary of the Article

• Federal Bank share price declined 5% after Q1FY26 results
• Net profit dropped 14.6% YoY to ₹861.8 crore
• Provisions surged 177%, led by microfinance and agri stress
• Net interest income saw a 2% YoY increase
• Gross NPA and net NPA ratios showed improvement
• Rise in credit costs and slippages flagged key concerns

The bank's Q1 performance presents a mixed picture—while profitability took a hit due to higher stress and provisions, asset quality trends remain encouraging.