Net interest income (NII) surged 15.7% YoY to ₹8,459 crore, but the bank’s net interest margin slipped to 4.31% from 4.54% a year earlier—an indicator of tightening lending profitability.
Operating profit climbed 21.1% YoY to ₹6,382.2 crore, up from ₹5,268.3 crore in the same quarter last year, signalling robust fee income despite margin pressure.
Asset quality improved sequentially: gross NPAs fell to 1.04% from 1.18% in June, while net NPAs dipped to 0.24% from 0.27%—provisions shrank 15.2% YoY to ₹803.6 crore, though they rose 20.3% quarter‑on‑quarter from ₹668 crore.
Funding dynamics show net advances up 25% YoY to ₹5,772.95 crore, with FCNR deposits inflating the base by ₹55,344 crore through international branches. The CASA ratio slid to 38.2% from 42.3% a year earlier, attributed to a larger term‑deposit base.
Market reaction: Kotak Mahindra Bank shares closed 1.5% lower at ₹430.50 on NSE, after a 4.2% rise over the past month and a 2.9% decline year‑to‑date.
Forward‑looking: The bank is expected to maintain steady margin performance and improve asset quality, while analysts monitor the impact of regulatory changes on its net interest margin. Q3 results are slated for release on 25 November 2026, with attention on the bank’s ability to sustain the 4.31% NIM trend.