Synopsis: Q3 FY26 shows a clear contrast between IDFC First Bank and Federal Bank, where one is driving aggressive growth and scale, while the other is delivering stability, strong asset quality, and consistent profitability.
Q3 FY26 highlighted just how differently India’s private banks are approaching growth and stability. Some banks went all out, aiming to rapidly expand their balance sheets. Others took a more cautious route, prioritizing asset quality and consistent results. Federal Bank and IDFC First Bank are good examples—both delivered strong numbers this quarter, but the paths they took were quite distinct.
In this article, we will compare two of the leading private banks, namely Federal Bank and IDFC First Bank, across key parameters like profitability, asset quality, deposits, and advances, etc., and in the end, we will look at which one of the two performed better.
Revenue and Profitability
Federal Bank reported a Net Interest Income (NII) of Rs 2,653 crore in Q3 FY26, representing a 9 percent growth as compared to Rs 2,431 crore in Q3 FY25. Additionally, it recorded a growth of 6 percent from its previous quarter figure of Rs 2,495 crore.
Coming to its consolidated profitability front, Federal Bank reported a net profit growth of 18 percent to Rs 1,125 crore in Q3 FY26 as compared to Rs 951 crore in Q3 FY25. Additionally, on a quarterly basis, it recorded a slight growth of 10 percent from Rs 1,023 crore. With this, the company reported its highest quarterly figure in both NII and profitability.
On the other hand, IDFC First Bank reported a Net Interest Income (NII) of Rs 10,417 crore in Q3 FY26, which is a growth of 11.5 percent from Rs 9,343 crore in Q3 FY25. Additionally, it recorded a growth of 4.8 percent from its previous quarter figure of Rs 9,937 crore.
Coming to its consolidated profitability front, IDFC First Bank reported a robust net profit growth of 41 percent to Rs 479 crore in Q3 FY26 as compared to Rs 340 crore in Q3 FY25. Additionally, on a quarterly basis, it recorded a growth of 38 percent from Rs 348 crore.
Overall, IDFC First Bank clearly outperformed Federal Bank during the period, both in terms of revenue and profitability, as it reported a higher net profit growth of 41 percent as compared to Federal Bank’s growth of 18 percent during the same period. Although Federal Bank reported its quarterly NII and net profit as an all-time high, suggesting good performance by the bank as well.
Asset Quality
Federal Bank’s asset quality strengthened during the period. GNPA declined by 23 bps to 1.72 percent as compared to 1.95 percent in Q3 FY25. Also, NNPA declined slightly by 7 bps and currently stands at 0.42 percent as compared to 0.49 percent in Q3 FY25.
Provision Coverage Ratio increased by 93 bps to 75.14 percent. Credit cost also declined by 11 bps to 0.47, and credit costs excluding MFI (Microfinance Institution) are even better at 0.29 percent, and the Slippage ratio for the whole bank also declined by 13 bps to 0.70 percent during the same period.
On the other hand, IDFC First Bank’s asset quality also followed the same trend. GNPA decreased by 25 bps to 1.69 percent as compared to 1.94 percent in Q3 FY25. However, NNPA increased slightly by 1 bps and currently stands at 0.53 percent as compared to 0.52 percent in Q3 FY25.
Provision Coverage Ratio remains healthy at 72.2%. Credit cost ratio also declined by 19 bps to 2.05 percent on a QoQ basis, and credit costs excluding MFI (Microfinance Institution) are even better at 1.99 percent.
Overall, Federal Bank performed better than IDFC First Bank on asset quality. Federal Bank showed a cleaner and more broad-based improvement with lower stress, better provisioning comfort, reduced slippages, and significantly lower credit costs, including in its non-microfinance book. IDFC First Bank also improved, but lingering stress and relatively higher credit costs indicate that its asset-quality recovery is still less settled compared to Federal Bank.
Deposits and Advances Growth
Federal Bank’s total deposits grew by 12 percent to Rs 2,97,796 crore in Q3 FY26 as against Rs 2,66,375 crore in Q3 FY25. CASA deposits were Rs 95,498 crore, with current account deposits at Rs 21,268 crore and Savings Account deposits at Rs 74,230 crore. CASA deposits accounted for 32 percent of the total deposits as of December 31, 2025.
Coming to total advances, it has a total loan book of Rs 2,65,722 crore, which grew by 9 percent YoY and 5 percent QoQ, where 55 percent of its loan book is exposed to Retail Book, 34 percent exposed to Corporate book, and the remaining 11 percent from Commercial.
On the other hand, IDFC First Bank’s total deposits have increased by 24 percent to Rs 2,82,662 crore in Q3 FY26 as against Rs 2,27,316 crore in Q3 FY25. CASA deposits were Rs 1,50,350 crore, which grew by 33 percent YoY from Rs 1,13,078 crore. CASA deposits accounted for 51.6 percent of the total deposits as of December 31, 2025.
Coming to total advances, it has a total loan book of Rs 2,79,428 crore, which grew by 21 percent YoY and 4.8 percent QoQ, where 58.73 percent of its loan book is exposed to Retail finance, 32.85 percent is exposed to Business finance, and the remaining 8.41 percent to Rural finance.
Overall, IDFC First Bank moved ahead of Federal Bank in Q3 FY26, demonstrating stronger growth and real momentum in its balance sheet. The bank’s deposits increased significantly, its CASA ratio rose sharply, and its loan book expanded rapidly. Federal Bank, meanwhile, maintained stability and took a cautious approach. Its deposit and loan growth were moderate, and its CASA mix remained lower, though it kept a balanced loan book. So, in simple terms, IDFC First Bank drove growth and strengthened its franchise, while Federal Bank stayed steady but didn’t push as aggressively.
Other Key Ratios
Federal Bank reported a Net Interest Margin of 3.18 percent, which grew slightly by 7 bps YoY and 12 bps QoQ. It reported an ROE and ROA of 11.68 percent and 1.15 percent respectively. Cost to Income grew by 80 bps YoY but declined slightly by 12 bps QoQ to 53.92 percent.
On the other hand, IDFC First Bank reported a Net Interest Margin of 5.76 percent, which declined 28 bps YoY but grew by 17 bps QoQ. It reported an ROE and ROA of 4.11 percent and 0.48 percent respectively. Cost to Income also increased by 120 bps to 74 percent in 9M FY26.
ROE and ROA comparisons should be read with caution, as the reported figures are based on different reporting periods
IDFC First Bank and Federal Bank took different paths in Q3 FY26. IDFC First Bank pushed aggressively for growth. Deposits and advances accelerated, CASA ratios improved, and the entire franchise showed increased momentum. Revenues and profits also soared.
On the other hand, Federal Bank opted for caution. Its balance sheet remained healthier, credit costs were low, and provisioning offered strong protection. Profitability ratios stayed consistent. Growth was slower, but Federal Bank delivered steady and intentional results.
In essence, IDFC First Bank represents the bold growth narrative, rapid, ambitious, and occasionally turbulent. Federal Bank stands for stability, prudence, reliability, and consistency. Ultimately, choosing between them depends on whether you prioritize aggressive growth or value stability.
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