Federal Bank Reports Mixed Financial Results, Highlighting Liquidity Gains and Profitability Concerns in June 2025

Federal Bank has recently reported its financial results for the quarter ending June 2025, revealing a complex picture of its performance. The bank's score has undergone an adjustment, reflecting notable shifts in its financial metrics over the past three months.
On a positive note, Federal Bank has achieved its highest cash and cash equivalents in the last six half-yearly periods, amounting to Rs 20,354.43 crore, indicating an improvement in short-term liquidity. However, several areas of concern have emerged from the latest financials. The Profit Before Tax less Other Income (PBT) has shown a significant decline, recorded at Rs 43.15 crore, which marks a substantial year-on-year decrease. Similarly, the Profit After Tax (PAT) has also fallen to Rs 861.75 crore, reflecting a negative trend in profitability.

Additionally, the bank's operating profit has reached its lowest point in the last five quarters at Rs 443.31 crore, and the operating profit margin has decreased to 6.63%. The reliance on non-operating income has become pronounced, constituting 96.27% of the PBT, raising questions about the sustainability of this income source. Furthermore, the earnings per share (EPS) have dropped to Rs 3.51, indicating a decline in shareholder earnings.

Overall, Federal Bank's recent financial results highlight both strengths and challenges, leading to a revision in its evaluation.

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