Private sector lender Federal Bank has reported an impressive 45.1 per cent year-on-year surge in net profit, reaching a record-breaking ₹1,386 crore for the July-September quarter of fiscal year 2026-27 (Q2FY27), propelled by robust net interest income growth, higher fee generation, and a remarkable enhancement in overall asset quality. Net interest income experienced a substantial 26.4 per cent year-on-year increase to reach ₹3,153.4 crore, while other income expanded by 37.7 per cent to ₹1,490.4 crore, bolstered by a 31.9 per cent rise in fee income to ₹1,167.7 crore, and net interest margin expanded by 26 basis points to 3.32 per cent, reinforcing the guidance provided by MD and CEO K V S Manian regarding consistent margin improvements. Asset quality indicators demonstrated phenomenal strength, with the gross non-performing asset ratio declining to 1.32 per cent and the net non-performing asset ratio easing to 0.17 per cent, marking both metrics at their lowest levels in a decade, alongside a 27.5 per cent reduction in fresh slippages to ₹420 crore and a lower credit cost of 0.31 per cent. On the balance sheet expansion front, total deposits surged by 18.6 per cent to touch ₹3.43 trillion, supported by a remarkable 22.6 per cent growth in low-cost current account and savings account deposits that elevated the CASA ratio by 103 basis points to 32.04 per cent, while non-resident deposits climbed 26.6 per cent to ₹1.19 trillion. Simultaneously, gross advances surpassed the major psychological milestone of ₹3 trillion to reach ₹3.02 trillion, driven by extraordinary performances across key lending segments including a 37.1 per cent spike in gold loans, a 32.2 per cent increase in loans against property, and solid expansions in credit card, commercial banking, and corporate institutional portfolios.