• Margin outlook: NIM was 3.32 this quarter, marginally impacted by FCNR by 1 bps versus last quarter. Management maintained guidance of 5 to 6 bps per quarter, not necessarily linearly, for the next 2 quarters.
• Profitability and costs: Net profit grew 45% YoY and operating profit 35% YoY; the cost-income ratio was 52.08, down almost 200 bps from last year Q2. ROA was 1.32, with a 1.5, 1.6 target over the three-year journey; management said it expects to reach 1.5 in another 6 quarters.
• Lending growth: Federal Bank maintained mid-teens advances growth guidance, with possible high teens if the environment supports it. Growth is focused on medium-yielding segments such as LAP, which grew 11%, while core agri grew only 1% QoQ as a conscious risk decision.
• Organic execution: Management highlighted resident savings growth of 5% and CASA up 103 bps, alongside continued focus on fee income, risk-adjusted asset returns, and tight control of costs and credit costs.
• Acquisition stance: The bank is not in active discussions on any inorganic opportunity, but will continue to evaluate acquisitions that fit its strategy and are accretive. Management favors a “string-of-pearls” approach of smaller acquisitions over a very large deal.