Federal Bank's board has approved a comprehensive proposal to raise up to ₹10,000 crore through the issuance of debt instruments in domestic and overseas markets, subject to shareholder and regulatory approvals. According to an exchange filing, the bank plans to raise funds in Indian rupees or any other permitted foreign currency through a range of debt securities on a private placement basis. The proposed fundraising will be undertaken within the bank's overall borrowing limits and will require shareholder approval, wherever applicable, as well as other statutory and regulatory clearances.
The proposed fundraising may include Additional Tier I (AT1) bonds, Tier II bonds, long-term infrastructure and affordable housing bonds, Masala Bonds, Green Bonds, non-convertible debentures (NCDs) and other debt securities permitted by the Reserve Bank of India (RBI) from time to time. As reported by the exchange filing, the issuance may be carried out in one or more tranches across domestic and international markets. The bank stated that the timing, quantum and mix of instruments will be decided based on market conditions and the bank's capital needs.
Federal Bank reported robust financial results for the quarter ended June 2026 (Q1FY27), with net profit rising 36.6% year-on-year to ₹1,177 crore, driven by healthy growth in net interest income and lower provisions. According to reports, the private sector lender's net interest income (NII) grew 26.1% YoY to ₹2,946 crore, compared with ₹2,337 crore in the corresponding quarter last year. The bank also achieved loan growth of 15% YoY and 5% quarter-on-quarter during the quarter.
On the asset quality front, Federal Bank showed significant improvement with gross non-performing assets (GNPA) improving to 1.52% from 1.62% in the March quarter, while net NPA (NNPA) declined to 0.18% from 0.20% sequentially. As reported, provisions fell sharply to ₹317 crore from ₹741 crore in the previous quarter and ₹400 crore a year ago. Fresh slippages also eased to ₹409 crore, compared with ₹474 crore in Q4FY26. However, net interest margin (NIM) moderated to 3.33% from 3.74% in the preceding quarter.
