Kotak Q2 profit rises 29% to Rs 4,212 crore

Kotak Mahindra Bank reported a 29 per cent year-on-year rise in standalone net profit to Rs 4,212 crore for the July-September quarter of FY27, compared with Rs 3,253 crore in the same period last year. Kotak Q2 profit grew on higher interest income and lower provisions, even as the bank's net interest margin narrowed during the quarter. The results were announced on Saturday, 24 October.

Consolidated profit after tax rose 26 per cent to Rs 5,645 crore from Rs 4,468 crore a year earlier. Net interest income, the difference between interest earned and interest paid, increased 16 per cent year-on-year to Rs 8,459 crore from Rs 7,311 crore. Sequentially, net interest income rose 7 per cent from Rs 7,928 crore in the June quarter.

Sequentially, consolidated profit grew 3 per cent from Rs 5,480 crore in the June quarter, while standalone profit rose 2 per cent from Rs 4,123 crore.

Kotak Q2 profit and interest income

Higher interest income did most of the work in the quarter, and Kotak Q2 profit also gained from lower provisions. Provisions declined 15 per cent year-on-year to Rs 803 crore from Rs 947 crore. Annualised credit cost fell to 0.35 per cent from 0.79 per cent in the year-ago quarter. Asset quality improved: gross non-performing assets declined to 1.04 per cent of advances as of 30 September 2026, from 1.39 per cent a year earlier, and net non-performing assets fell to 0.24 per cent from 0.32 per cent.

Kotak Q2 profit: margins narrow on FCNR deposits

The bank's net interest margin narrowed to 4.31 per cent from 4.54 per cent in the year-ago quarter and 4.53 per cent in the preceding quarter. Kotak Mahindra Bank said the moderation in net interest margin was largely on account of FCNR(B) mobilisation during the quarter. During the quarter, the bank mobilised approximately Rs 55,344 crore in Foreign Currency Non-Resident (Bank) deposits and provided loans aggregating to around Rs 16,110 crore through its international branches.

The large foreign currency deposit inflows also lifted headline growth in advances and deposits. Net advances increased 25 per cent year-on-year to Rs 5,77,295 crore as of 30 September 2026, but excluding loans against FCNR(B) deposits and the loan portfolio acquired from Kotak Mahindra Investments, advances grew 19 per cent. Total deposits rose 23 per cent to Rs 6,51,491 crore, but growth stood at 13 per cent excluding FCNR deposits.

The bank's current account and savings account (CASA) ratio declined to 38.2 per cent from 42.3 per cent a year ago. Excluding FCNR deposits, the ratio stood at 41.8 per cent. Kotak Q2 profit therefore came with a balance sheet that grew faster on paper than on an underlying basis, because the foreign currency inflows flattered the headline numbers.

Kotak Q2 profit and the road ahead

Kotak Mahindra Bank closed the quarter with advances of Rs 5,77,295 crore and deposits of Rs 6,51,491 crore. The bank's margin question now rests on how quickly the FCNR(B) deposit effect fades and whether loan growth holds without it. Provisions of Rs 803 crore were lower than a year earlier, and gross non-performing assets of 1.04 per cent were below the year-ago level. Kotak Q2 profit of Rs 4,212 crore is the quarter's headline figure, with consolidated profit after tax at Rs 5,645 crore.