Federal Bank share price declines over 4% after Q4 earnings; here is what you need to know

The bank’s net interest income during the period grew 8.3% to ₹2,377.4 crore as against ₹2,195.2 crore year-on-year (YoY).

The net interest income (NII) is one of the key metrics to assess a banking or financial entity's financial performance.

According to media reports, various brokerages have maintained their rating for the bank but have cut their target prices.  

Following this, shares of the Federal Bank were trading at ₹189.02 apiece on the National Stock Exchange, falling 3.89%.

Federal Banks’ gross non-performing asset (NPA) for the March quarter stood at ₹4,375.5 crore quarter-on-quarter (QoQ). In the last quarter, the gross NPA was at ₹4,553.3 crore.

Sequentially, the net NPA for the quarter was recorded at ₹1,040.4 crore as against ₹1,131.2 crore in Q3 FY25.

Supported by strategic initiatives, net interest margin (NIM) improved to 3.12% in Q4 FY25.

However, Nomura has flagged concerns over the near-term NIM outlook. It believes while fundamentals remain intact, investors may need to reset return expectations amid the current interest rate cycle and cost pressures.

Another brokerage firm, Nuvama, has also acknowledged NIM pressures for the lender.

Commenting on the result, CEO and Managing Director KVS Manian said, “As we have consistently articulated, our focus remains on profitable growth—driven by sustainable, high-quality earnings aligned with long-term value creation. This quarter’s performance is a strong validation of that approach."

Federal Bank’s total deposits increased by 12.32% during the quarter, while total net advances also grew 12.15%.

For the quarter, the bank saw its highest-ever other income backed by strong fee income momentum. The banks’ total business reached ₹5.18 lakh crore.

As of March 31, 2025, the net worth of the bank increased 13.86% YoY to ₹33,121.64 crore from ₹29,089.41 crore.

"It has also been a transformative year for the bank, with several strategic initiatives beginning to deliver tangible outcomes. Notably, our focused efforts in mid-yield segments and current accounts have shown significant traction, with current account balances growing 35% YoY (27% QoQ) and a 19% growth in mid-yield segments,” said Manian.

After opening at ₹195.93 apiece, shares of The Federal Bank had touched a low of ₹188.05 during the intraday period.

In the last five trading days, the bank shares have fallen 5.4%. The stock has declined over 7.6% since November 4, 2024, which is for six months. Year-to-date, it has lost almost 6%.

The market capitalisation of the bank stood at ₹46,441.19 crore.

The lender’s shares had touched their 52-week high of ₹217 apiece on December 5, 2024. Its one-year low was seen on June 4, 2024, at ₹148 per share.