Kotak Mahindra Bank on Saturday reported a 26 per cent year-on-year rise in consolidated net profit to ₹5,645 crore for the July-September quarter of FY27 (Q2FY27), from ₹4,468 crore in Q2FY26.
Sequentially, consolidated profit rose 3 per cent from ₹5,480 crore in the June quarter (Q1FY27).
On a standalone basis, the bank reported a 29 per cent year-on-year rise in net profit to ₹4,212 crore for the September quarter, supported by lower provisions and 16 per cent growth in net interest income (NII), even as margins contracted due to inflows of foreign currency non-resident (bank), or FCNR(B), deposits.
The bank had earned ₹3,253 crore in Q2FY26. Sequentially, standalone profit rose 2 per cent from ₹4,123 crore in Q1FY27.
Net interest income rose 16 per cent year-on-year to ₹8,459 crore from ₹7,311 crore in Q2FY26.
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Sequentially, NII increased 7 per cent from ₹7,928 crore in Q1FY27.
Net interest margin (NIM) stood at 4.31 per cent, compared with 4.54 per cent a year earlier and 4.53 per cent in Q1FY27.
The bank said the moderation was largely due to FCNR(B) mobilisation during the quarter.
It raised FCNR(B) deposits of about ₹55,344 crore and extended loans of about ₹16,110 crore through its international branches.
Cost of funds stood at 4.52 per cent in Q2FY27, compared with 4.70 per cent a year ago and 4.46 per cent in Q1FY27.
Fee and services income rose 21 per cent year-on-year to ₹2,926 crore.
Operating expenses increased 14 per cent to ₹5,271 crore.
Provisions fell 15 per cent year-on-year to ₹803 crore from ₹947 crore, though they were higher than ₹668 crore in Q1FY27.
Annualised credit cost stood at 0.35 per cent, compared with 0.79 per cent in Q2FY26 and 0.46 per cent in Q1FY27.
Asset quality improved during the quarter.
Slippages declined 24 per cent to ₹1,230 crore from ₹1,629 crore.
Gross non-performing assets (GNPA) stood at 1.04 per cent of advances as of September 30, 2026, compared with 1.39 per cent a year earlier.
Net NPA declined to 0.24 per cent from 0.32 per cent.
The provision coverage ratio stood at 78 per cent, compared with 77 per cent a year ago.
Net advances grew 25 per cent year-on-year to ₹5.77 trillion.
Excluding loans against FCNR(B) deposits and the loan portfolio acquired from Kotak Mahindra Investments (KMIL), advances grew 19 per cent.
Total deposits increased 23 per cent to ₹6.51 trillion, or 13 per cent excluding FCNR(B) deposits.
The current account and savings account (CASA) ratio declined to 38.2 per cent from 42.3 per cent a year ago, which the bank attributed to the increase in term deposits from FCNR(B) inflows.
Excluding FCNR(B) deposits, the CASA ratio stood at 41.8 per cent.
The credit-to-deposit ratio was 88.6 per cent, compared with 87.5 per cent.
Standalone annualised return on assets (ROA) stood at 1.92 per cent, while return on equity (ROE) was 11.65 per cent.
The capital adequacy ratio was 21.9 per cent, with the common equity tier-1 (CET1) ratio at 21.4 per cent.
Among subsidiaries, Kotak Securities reported a profit of ₹348 crore, while Kotak Mahindra Prime posted ₹251 crore.
Kotak Mahindra Life Insurance reported a profit of ₹198 crore.
Kotak Asset Management and Trustee Company earned ₹287 crore, while Kotak Alternate Asset Manage₹reported a profit of ₹87 crore.
(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)