Federal Bank Q2 net profit jumps 45 pc on FCNR deposits

Federal Bank has reported a strong set of numbers for the second quarter of the fiscal year, with its net profit surging by 45% to ₹1,386 crore. This growth was primarily driven by a significant increase in its net interest income, which climbed 26% to ₹3,153 crore. A key factor behind this performance was the bank's ability to raise substantial foreign currency non-resident (bank) deposits, which helped bolster its balance sheet.

For investors, the rise in FCNR deposits is a positive signal. It indicates that the bank has successfully tapped into global markets to secure low-cost funding, which is crucial for maintaining healthy margins. This move not only strengthens the bank's liquidity but also diversifies its funding sources, reducing reliance on domestic markets. The robust growth in interest income suggests that the bank is effectively managing its loan portfolio and earning better returns on its assets.