Fedbank Financial Services Ltd, a subsidiary of Federal Bank, announced on Wednesday (August 19) that it will consider a proposal to raise funds of up to ₹2,500 crore through debt instruments, including non-convertible debentures, at a board meeting scheduled for August 25, 2026. According to reports from CNBC TV18, the proposed fundraise will be part of an increase in the company's overall borrowing limit and will be subject to approval from shareholders at the ensuing Annual General Meeting. The Board of Directors will meet on Tuesday, August 25, to consider and approve the proposed fundraise through debt instruments, including non-convertible debentures in either Indian or foreign currency.
Fedbank Financial Services reported robust financial results for the June quarter, with net profit rising 52.5% year-on-year to ₹114.4 crore from ₹75 crore in the corresponding period last year. As reported by CNBC TV18, total income increased by 29.6% to ₹670.3 crore from ₹517.3 crore last year. Net interest income (NII) or core income for the Federal Bank unit rose by 38.7% year-on-year to ₹371.9 crore, while operating profit increased by 49.9% to ₹187.5 crore during the quarter. The company achieved a return on assets (RoA) of 2.6% and return on equity (RoE) of 15.4% during the quarter.
The company demonstrated strong asset growth with assets under management (AUM) growing 34.7% year-on-year to ₹21,136 crore, while disbursements increased 13.9% to ₹6,760 crore. According to CNBC TV18, gold loan AUM surged 76.7% to ₹11,191 crore, accounting for 52.9% of the company's total loan book, while mortgage AUM grew 14.5% to ₹9,777 crore. The company reported that 99.2% of its AUM remains secured, reflecting its collateral-backed lending model. On the asset quality front, gross Stage III assets improved to 1.6% from 1.9% in the March quarter and 2.0% a year earlier, while net Stage III assets declined to 1.0% from 1.3% sequentially.
The lender showed improved operational metrics with cost-to-income ratio improving to 52.8% from 56.9% in the preceding quarter and 58.2% a year ago. As reported by CNBC TV18, credit cost remained low at 0.8% during the quarter, while the capital adequacy ratio stood at 20.7%. As of June 30, Fedbank Financial Services operated 757 branches across 17 states and Union Territories and had 5,376 employees. Shares of the company ended at ₹149.50, down by ₹1.15, or 0.76%, on the BSE.
