Kotak Mahindra Bank Q1 Results: Net Profit Falls 7% To Rs 3,282 Cr; Higher Provisions Offset NII Growth

On Saturday, July 26, Kotak Mahindra Bank's Board of Directors released the financial results for the quarter that ended on June 30, 2025. With a net interest margin (NIM) of 4.65%, Kotak Mahindra Bank recorded a standalone profit after tax (PAT) of Rs 3,282 crore in Q1FY26, a 7% YoY drop. With the help of a robust 13% growth in credit and driven by 14% growth in advances and a healthy NIM of 4.65%, net interest income increased 6% YoY to Rs 7,259 crore.

Fee and service income of Rs 2,249 crore and strong trading gains drove the Rs 3,080 crore in other income. Although higher provisions and contingencies surged to Rs 1,208 crore, up 109% YoY had an effect on the bottom line, operating profit climbed 6% YoY to Rs 5,564 crore. The bank recorded an ROE of 10.94% and maintained a solid cost-to-income ratio of 46.19%.

As of June 30, 2025, the bank's balance sheet has grown to Rs 6.89 trillion from Rs 6.05 trillion during the same period of the previous year. While investments totalled Rs 1.82 trillion, net advances climbed 14% year on year to Rs 4.44 trillion. Deposits rose 15% YoY to Rs 5.13 trillion, with 40.9% coming from current and savings account (CASA) deposits. With CAR at 23.0% and CET-I at 22.4%, capital adequacy remained excellent.

With a CASA ratio of 40.9% compared to 43.4% in Q1FY25, Kotak maintained a sound deposit profile with 19% YoY growth in term deposits. The bank's consistent NIM was supported by an average savings account cost of 3.32% and an overall cost of funds handled at 5.01%.

With gross non-performing assets (NPAs) at 1.48% compared to 1.42% in Q4FY25 and 1.39% in Q1FY25, and net non-performing assets (NPAs) at 0.34% compared to 0.31% in Q4FY25, Kotak Mahindra Bank maintained high asset quality in Q1FY26. With a provision coverage ratio (PCR) of 77%, a conservative provisioning approach can be highlighted. Upgrades and recoveries came to Rs 549 crore, while fresh slippages climbed to Rs 1,812 crore from Rs 1,488 crore in Q4FY25. With write-offs of Rs 759 crore, active cleanup of stressed assets was indicated.

With a market valuation of Rs 4.30 trillion as of June 30, 2025, Kotak Mahindra Bank is still a leader in diverse financial services. With 2,154 bank branches and 2,927 automated teller machines (ATMs) spread throughout India as of June 30, 2025, Kotak also has a presence abroad in Dubai, GIFT City, New York, London, Mauritius, Singapore, and Abu Dhabi. With its subsidiaries, the firm has 5,440 branches nationwide, evenly distributed between metro areas (46%), urban areas (22%), semi-urban areas (15%), and rural areas (17%).