For the quarter ending 30 September 2025 (Q2 FY26), Kotak Mahindra Bank reported its financial results on October 25, 2025, showcasing steady progress in loans and deposits, accompanied by a notable improvement in asset quality despite a modest dip in profitability.
The standalone net profit stood at ₹3,253 crore, down 2.7% year-on-year from ₹3,344 crore in the corresponding quarter of the previous fiscal. On a consolidated basis, which includes subsidiaries, the net profit was ₹4,468 crore, compared with ₹5,044 crore a year earlier.
Key Financial Highlights
The Net Interest Income (NII) increased 4% year-on-year to ₹7,311 crore, up from ₹7,020 crore in Q2 FY25, reflecting healthy growth in interest earnings. The Net Interest Margin (NIM) held firm at 4.54%, while the cost of funds stood at 4.70% for the quarter, underscoring the bank’s consistent margin management.
The operating profit rose 3% year-on-year to ₹5,268 crore, highlighting resilient operational performance. Meanwhile, provisions were reported at ₹947 crore, higher than ₹660 crore in Q2 FY25 but below ₹1,208 crore in the preceding quarter, indicating stable asset provisioning.
Steady Growth in Advances and Deposits
Kotak Mahindra Bank’s net advances expanded 16% year-on-year to ₹4,62,688 crore, compared to ₹3,99,522 crore in the same period last year. The growth was broad-based across segments, reflecting strong credit demand.
Average total deposits climbed 14% year-on-year to ₹5,10,538 crore, supported by balanced contributions from current, savings, and term deposits. The CASA ratio stood at 42.3% as of 30 September 2025, while the credit-to-deposit ratio remained stable at 87.5%.
A closer look at deposit composition shows:
- Average current deposits rose 14% year-on-year to ₹70,220 crore.
- Average fixed-rate savings deposits increased 8% year-on-year to ₹1,13,894 crore.
- Average term deposits recorded the strongest growth, advancing 20% year-on-year to ₹3,11,889 crore.
The bank continues to deepen its customer base, now serving 5.2 crore clients nationwide.
Improvement in Asset Quality and Capital Strength
The lender demonstrated notable improvement in asset quality during the quarter.
- Gross Non-Performing Assets (GNPA) declined to 1.39%, compared with 1.49% a year ago.
- Net Non-Performing Assets (NNPA) improved to 0.32%, down from 0.43% in Q2 FY25.
The Provision Coverage Ratio (PCR) remained strong at 77%, reflecting prudent credit management.
Under Basel III guidelines, the bank reported a Capital Adequacy Ratio of 22.1% and a CET1 ratio of 20.9%, including unaudited profits — underscoring its solid capital position and ability to absorb potential credit risks.
Operational Efficiency and Returns
Fee and service income rose 4% year-on-year to ₹2,415 crore, supported by diversified income streams. Operating expenses edged up 1% year-on-year to ₹4,632 crore, showing effective cost control. The annualised credit cost improved to 0.79%, compared with 0.93% in the preceding quarter.
On a standalone basis, Return on Assets (ROA) stood at 1.88%, and Return on Equity (ROE) was 10.38% for the quarter. At the consolidated level, the ROA and ROE were 1.97% and 10.65%, respectively, indicating sustained efficiency.
The bank’s book value per share rose 14% year-on-year to ₹844, up from ₹740 in the prior year.
Leadership Commentary and Outlook
Chief Executive Officer Ashok Vaswani highlighted that growth during the quarter was driven by customer-focused initiatives and improving consumer sentiment, boosted by GST rate adjustments and the festive season. He acknowledged pockets of pressure in the retail commercial vehicle segment but reiterated the bank’s measured approach to unsecured lending, with gradual expansion planned over time.
Chief Financial Officer Devang Gheewalla added that the bank remains well-capitalised and fully prepared to meet Expected Credit Loss (ECL) provisioning norms, backed by robust capital buffers and steady earnings performance.
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Conclusion
Kotak Mahindra Bank’s second-quarter results reflect stable operational momentum, sound asset quality, and healthy capital ratios, despite a marginal decline in profit. The bank’s disciplined approach to lending, strong balance sheet, and continued digital initiatives position it well to sustain growth in India’s dynamic banking landscape.
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