Federal Bank CEO Confirms No Immediate Acquisition Deals

Federal Bank's Managing Director and CEO, KVS Manian, announced that the bank is continuously assessing acquisition opportunities within the financial services sector, although no immediate deals are currently in progress. During a recent earnings call, Manian emphasized the bank's commitment to exploring options in both core and universal banking, stating, "We are constantly evaluating opportunities, but nothing to report just now."

This statement follows reports that Federal Bank is in advanced discussions with Jana Small Finance Bank regarding a potential share-swap agreement. Earlier reports indicated that Federal Bank was considering acquiring Jana SFB's assets and liabilities, with discussions ongoing about the swap ratio for this transaction. If finalized, this deal could mark Federal Bank's second acquisition in 2026, following its earlier agreement to acquire up to 450,000 credit cards from Standard Chartered India, aimed at enhancing its urban retail banking presence.

Manian also provided insights into the bank's credit card business, noting that the integration of Standard Chartered's portfolio is expected to be completed by the end of the year. He highlighted that this addition could increase Federal Bank's existing credit card portfolio by 15-20%, as the bank's credit card book has already surpassed 2 million cards. "That is a business that we are continuing to remain focused on," he remarked.

In addition to acquisition discussions, the bank recently closed its foreign currency non-resident bank (FCNR-B) deposit scheme, garnering approximately $1.5 billion (around Rs 14,922 crore). Manian reassured stakeholders that these inflows would not significantly impact the bank's net interest margin (NIM), despite acknowledging a minor effect. He stated, "While of course the FCNR has some impact on the NIM, we are quite confident of maintaining our trajectory on NIM going forward."

Looking ahead, Federal Bank reported a 22% growth in net advances, totaling Rs 2.98 lakh crore, and a 19% increase in total deposits to Rs 3.42 lakh crore. Manian indicated that the recent inflows could be utilized for both loan disbursements and retiring costly bulk deposits, reinforcing the bank's focus on maintaining a healthy risk-adjusted NIM as it evaluates future opportunities.