Federal Bank Reports Flat Performance Amid Record Low NPA Ratios in March 2025 Results

Federal Bank has recently reported its financial results for the quarter ending March 2025, revealing a flat performance during this period. The evaluation changes indicate a notable shift in the bank's score, which has adjusted from 5 to -1 over the last three months.
On a positive note, the bank has achieved its lowest Gross Non-Performing Assets (NPA) ratio at 1.84%, continuing a downward trend over the past five quarters. Similarly, the Net NPA ratio has also reached a low of 0.44%, reflecting a decrease in the proportion of stressed loans. Additionally, the Capital Adequacy Ratio (CAR) stands at its highest in five quarters at 16.40%, suggesting an improvement in the bank's capital base relative to its risk assets. However, this may indicate a conservative approach to risk in its lending practices.

Conversely, the bank's Profit Before Tax less Other Income (PBT) has shown a significant decline, falling to Rs 321.34 crore, marking a 28.76% decrease year on year. This figure represents the lowest PBT in the last five quarters, with a concerning trend in the near term. Furthermore, non-operating income has constituted a substantial portion of the PBT, raising questions about the sustainability of the bank's income sources.

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