Private sector lender Federal Bank Ltd on Tuesday (March 25) said it has signed a binding memorandum of understanding (MoU) with Ageas Insurance International NV and Ageas Federal Life Insurance Company Limited (AFLIC) to acquire a 4% equity stake in AFLIC for ₹97.44 crore.

The acquisition will increase Federal Bank’s stake in AFLIC from 26% to 30%. The deal involves the purchase of 3.2 crore shares at ₹30.45 per share and is subject to regulatory approvals from the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (IRDAI).

The acquisition is expected to be completed on or before October 31, 2025. AFLIC, a joint venture between Ageas Insurance International NV and Federal Bank, reported a net worth of ₹1,176 crore, assets under management of ₹17,455 crore, and a net profit of ₹107 crore in FY24.

Also Read: Federal Bank’s new CEO sees opportunity in current accounts, wealth business

For the third quarter, the bank’s net profit stood at ₹955.4 crore, down 5% year-on-year (YoY) from ₹1,006.7 crore and below the CNBC-TV18 poll estimate of ₹1,022 crore. Meanwhile, net interest income (NII) grew 14.5% YoY to an all-time high of ₹2,431.3 crore, surpassing the poll estimate of ₹2,415 crore.

On the asset quality front, the bank reported an improvement with its gross NPA declining to ₹4,553.3 crore from ₹4,884.5 crore in the previous quarter. The net NPA also dropped to ₹1,131.2 crore from ₹1,322.9 crore (QoQ).

The gross NPA ratio improved to 1.95%, compared to 2.09% in Q2 FY24, while the net NPA ratio declined to 0.49%, from 0.57% in the prior quarter. In a stock exchange filing, the bank called it its best asset quality performance in over a decade, reflecting its robust risk management framework and commitment to financial performance.

Also Read: Federal Bank re-rating to continue post new CEO appointment, say analysts

Shares of Federal Bank Ltd ended at ₹194.70, down by ₹1, or 0.51%, on the BSE.