Kotak Mahindra Bank on Saturday reported a 26 per cent year-on-year (YoY) rise in consolidated net profit to ₹5,645 crore for the July-September quarter of FY27 (Q2FY27), from ₹4,468 crore in Q2FY26. Sequentially, profit was up 3 per cent from ₹5,480 crore in the June quarter (Q1FY27).
On a standalone basis, the bank reported a 29 per cent YoY rise in net profit to ₹4,212 crore for the September quarter (Q2FY27). The rise came on lower provisions and 16 per cent growth in net interest income (NII), even as the bank’s margin contracted on inflows of foreign currency non-resident (bank) [FCNR(B)] deposits. The bank had reported a net profit of ₹3,253 crore in Q2FY26. Sequentially, profit was up 2 per cent from ₹4,123 crore in Q1FY27.
Net interest income (NII) rose 16 per cent YoY to ₹8,459 crore from ₹7,311 crore in Q2FY26. Sequentially, it was up 7 per cent from ₹7,928 crore in Q1FY27.
Net interest margin (NIM) stood at 4.31 per cent, against 4.54 per cent a year earlier and 4.53 per cent in Q1. The bank said the moderation was largely on account of 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 was 4.52 per cent in Q2FY27, compared with 4.70 per cent a year ago and 4.46 per cent in Q1.
Fee and services income rose 21 per cent YoY to ₹2,926 crore in Q2FY27.
Operating expenses increased 14 per cent to ₹5,271 crore.
Provisions fell 15 per cent YoY to ₹803 crore from ₹947 crore, though they were higher than ₹668 crore in Q1.
Annualised credit cost was 0.35 per cent, against 0.79 per cent in Q2FY26 and 0.46 per cent in Q1.
Asset quality of the bank improved. Slippages declined 24 per cent to ₹1,230 crore in Q2FY27 from ₹1,629 crore in the year-ago period. Gross non-performing assets (GNPA) were 1.04 per cent of advances as of September 30, against 1.39 per cent a year earlier. Net NPA was 0.24 per cent, against 0.32 per cent in Q2FY26. The provision coverage ratio stood at 78 per cent, compared with 77 per cent in the year-ago quarter.
Net advances grew 25 per cent to ₹5.77 trillion in Q2FY27. Excluding loans against FCNR(B) deposits and the loan portfolio acquired from Kotak Mahindra Investments (KMIL), growth was 19 per cent.
Total deposits rose 23 per cent to ₹6.51 trillion, or 13 per cent excluding FCNR(B) deposits, in the July-Sept quarter of FY27.
The current account and savings account (CASA) ratio fell to 38.2 per cent in Q2FY27 from 42.3 per cent a year ago, which the bank attributed to the increase in term deposits from FCNR(B) inflows. Excluding these deposits, the ratio was 41.8 per cent. The credit-to-deposit ratio was 88.6 per cent in Q2FY27, compared with 87.5 per cent in the year-ago period.
Standalone annualised return on assets (ROA) was 1.92 per cent and return on equity (ROE) was 11.65 per cent. The capital adequacy ratio was 21.9 per cent, with a CET1 ratio of 21.4 per cent.
For the quarter under review, among subsidiaries, Kotak Securities reported a profit of ₹348 crore and Kotak Mahindra Prime ₹251 crore. Kotak Mahindra Life Insurance posted a profit of ₹198 crore. Kotak Asset Management and Trustee Company earned ₹287 crore in profit, while Kotak Alternate Asset Managers earned ₹87 crore in profit.
(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)