Kotak Mahindra Bank Q2 results: Net profit falls 2.7%, asset quality improves

Kotak Mahindra Bank reported a standalone net profit of ₹3,253 crore for the quarter ended September 30, down 2.7% year-on-year from ₹3,344 crore in Q2 FY25. Consolidated net profit, which includes subsidiaries, stood at ₹4,468 crore, compared with ₹5,044 crore a year earlier.

The bank’s net interest income increased 4% YoY to ₹7,311 crore from ₹7,020 crore in Q2 FY25, while the net interest margin remained at 4.54%.

Operating profit rose 3% YoY to ₹5,268 crore.

Provisions during the quarter were ₹947 crore, higher than ₹660 crore in the same quarter last year but lower than ₹1,208 crore in the preceding quarter.

Asset quality improved, with gross non-performing assets at ₹6,480 crore, down from ₹6,638 crore in Q1 FY26.

Net NPA declined to ₹1,491 crore from ₹1,531 crore sequentially. The gross NPA ratio stood at 1.39%, while the net NPA ratio was 0.32%, compared with 1.48% and 0.34% respectively in Q1 FY26.

Standalone advances grew 16% YoY to ₹462,688 crore, while average total deposits increased 14% YoY to ₹510,538 crore. Kotak Mahindra Bank’s CASA ratio was 42.3%, and the credit-to-deposit ratio stood at 87.5%. The bank served 5.2 crore customers as of September 30, 2025.

The bank’s capital position remained robust, with a Basel III capital adequacy ratio of 22.1% and a CET1 ratio of 20.9%, including unaudited profits. Return on assets and return on equity for the quarter (annualized) were 1.88% and 10.38%, respectively.

At the consolidated level, total customer assets, including advances and credit substitutes, grew 13% YoY to ₹576,339 crore, while assets under management increased 12% YoY to ₹760,598 crore. The domestic mutual fund equity AUM rose 14% YoY to ₹362,694 crore.

The bank’s book value per share increased to ₹844, up 14% YoY from ₹740. Return on assets and return on equity at the consolidated level for Q2 FY26 were 1.97% and 10.65% annualised, respectively.