Federal Bank's share price experienced a significant surge during Friday's trading session. The stock jumped by 13 percent, reaching ₹278.40 per share. This sharp rise occurred in the second half of trading on January 16. Investors showed strong positive sentiment following the bank's latest financial report.
Impressive Quarterly Performance
The bank announced its results for the quarter ending December. Federal Bank reported a net profit of ₹1,041.21 crore. This figure represents a solid 9 percent increase compared to the same period last year. Strong core income and effective operating leverage supported this profit growth.
Key Financial Metrics Show Strength
The bank's net interest income, known as NII, also showed improvement. NII reached ₹881 crore in the third quarter. This is higher than the ₹869 crore recorded in the corresponding quarter of the previous financial year. Net interest margin expanded by 12 basis points quarter-on-quarter to 3.18 percent.
Improvements in the liability mix and asset repricing supported this NIM expansion. On the operating front, pre-provision operating profit rose to ₹1,729 crore. This marks a healthy 10.2 percent year-on-year growth from ₹1,559 crore.
Asset Quality Reaches Decadal Lows
Federal Bank demonstrated notable improvement in asset quality during the quarter. Gross non-performing assets declined by 23 basis points year-on-year to 1.72 percent. Net NPAs fell by 7 basis points year-on-year to 0.42 percent. Both these metrics reached their lowest levels in ten years.
However, overall provisions, excluding tax, increased to ₹332 crore. This is up from ₹292 crore a year ago. Slippages at the end of the December quarter improved to ₹443 crore. This figure is lower than the ₹584 crore recorded during the second quarter of last year.
Strategic Expansion and Stake Increase
The bank continued its calibrated expansion strategy during the quarter. Federal Bank added six new branches. This move aligns with its market-focused growth approach.
Meanwhile, the bank also increased its stake in Ageas Federal Life Insurance Company. The stake rose from 26 percent to 30 percent. Federal Bank acquired 3.2 crore shares at ₹30.45 per share to achieve this increase. The transaction completed in November 2025. It received all necessary approvals from the Reserve Bank of India and IRDAI.
Sustained Bull Run for Banking Shares
Banking shares have been on a bull run since September. They have gained 42 percent during this period. Federal Bank's stock finished 2025 with a solid 34 percent gain. This marks its fifth consecutive annual winning run.
The rally contributed to a 95 percent surge over three years. Over five years, the stock delivered an impressive 270 percent return. Considering the stock's 2020 low of ₹35.70 per share, it has delivered a massive return of 674 percent.
Shareholding Pattern and Investor Interest
According to recent shareholding data, Rekha Jhunjhunwala held a 2.42 percent stake at the end of December 2025. She is the wife of late investor Rakesh Jhunjhunwala. Domestic mutual funds held the largest stake in the company at 37.52 percent.
Foreign institutional investors followed with a 25.5 percent holding. The public held 24.7 percent of the shares. This distribution shows continued institutional confidence in the bank's performance.
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