Q2 Banking Boom: Federal Bank Profit Jumps 45%, Ujjivan SFB Triples Net to ₹365 Cr
Dalal Street’s banking index witnessed active institutional interest on Friday, October 16, 2026, as private lender Federal Bank and micro-lending major Ujjivan Small Finance Bank announced their financial scorecards for the July–September quarter of fiscal year 2026-27. Both banking institutions delivered strong operational outperformance characterized by aggressive year-on-year bottom-line growth, net interest income (NII) expansion exceeding 25%, and sequential declines in non-performing assets (NPAs). Despite the upbeat financial prints, both counters experienced sharp intraday volatility as investors parsed underlying cost dynamics, provisioning buffers, and fresh equity capital expansion announcements.
Federal Bank Delivers Steady Operational Beat: Net Profit Hits ₹1,386 Crore on 26% NII Surge
Leading the private banking pack, Kerala-based Federal Bank recorded a stellar 45.1% year-on-year increase in consolidated net profit, reaching ₹1,386 crore for the second quarter compared to ₹955 crore in the corresponding period of the previous fiscal year. Core operational earnings demonstrated robust momentum, with net interest income advancing 26.4% year-on-year to ₹3,153.4 crore against ₹2,495.2 crore reported in the year-ago period. Asset quality witnessed notable sequential improvement, as gross non-performing assets (GNPA) eased by 20 basis points to 1.32% from 1.52% in the June quarter, while net non-performing assets (NNPA) softened marginally to 0.17% compared to 0.18% in the previous quarter. The bank’s credit provisions stood at ₹342 crore, up sequentially from ₹318 crore but down from ₹363 crore set aside in Q2 of the preceding fiscal year. Following the earnings disclosure, Federal Bank shares saw high-volume price swings, touching a post-earnings peak of ₹345 before paring gains, yet recovering from intraday lows after 2:00 PM to trade at ₹337.50, up more than 0.5% above its prior close and nearly 3% off its intraday trough.
Ujjivan SFB Profits Triple to ₹365 Crore: Clears ₹409-Crore Preferential Issue to IFC and Insurers
In the small finance banking segment, Ujjivan Small Finance Bank delivered an exponential operational turnaround, with net profit surging nearly three-fold (up 199% year-on-year) to ₹365 crore compared to ₹122 crore logged in the same quarter last year. The lender's net interest income climbed 35.4% year-on-year to settle at ₹1,248.4 crore versus ₹921.7 crore in the previous year, highlighting sustained credit disbursement appetite across retail and micro-credit portfolios. The bank’s asset quality parameters strengthened, with gross NPAs contracting to 2.10% from 2.16% sequentially, and net NPAs dropping to 0.31% from 0.34%, aided by quarterly provisions declining to ₹103 crore from ₹127.3 crore in the prior quarter and ₹235 crore in Q2 last year. However, overhead pressures persisted as other operating expenditures escalated to ₹438 crore from ₹347.3 crore in the year-ago period. Alongside the results, Ujjivan SFB's board approved a strategic capital-raising proposal through a preferential equity issue of ₹409 crore, allotting shares to the International Finance Corporation (IFC) and three insurance companies at an issue price of ₹64.73 per share. Despite the robust profit expansion, the counter faced immediate 'sell-the-news' profit taking; after touching an initial post-result high of ₹66, the stock slid below ₹64, down nearly 2% from its previous closing level.
