Kotak Bank profit rose 29% year on year to ₹4,211 crore on a stand-alone basis for the three months ended September 2026, exceeding analyst expectations. Results announced on October 24 showed stronger lending and lower provisions supporting earnings, even as the bank’s net interest margin declined.
Key Takeaways
- Stand-alone profit exceeded the ₹4,104 crore analyst estimate compiled by LSEG.
- Domestic loans and deposits both expanded by more than 20% year on year.
- The net interest margin narrowed despite higher net interest income.
Table of Contents
- Kotak Bank profit grows faster than interest income
- Foreign-currency funding accompanies margin pressure
- Bad-loan ratio improves alongside lending growth
- Conclusion
Kotak Bank profit grows faster than interest income
Kotak Mahindra Bank’s quarterly stand-alone net profit increased from ₹3,253 crore a year earlier. The result was ₹107 crore, or about 2.6%, above the analyst estimate compiled by LSEG.
Net interest income—the difference between interest earned and interest paid—rose 16% year on year to ₹8,460 crore. Stronger domestic lending helped lift that income, while lower provisions for potential bad loans and other losses also supported the bottom line.
Other income, which includes earnings from bonds and other investments, increased during a quarter marked by volatile currency and debt markets.
| Item | Details |
|---|---|
| Domestic loans | Up 25% year on year in the September 2026 quarter. |
| Deposits | Up 23% year on year. |
| Other income | ₹3,194 crore, up 23% year on year. |
| Provisions for potential bad loans and other losses | Down 15% year on year. |
Foreign-currency funding accompanies margin pressure
Net interest margin fell to 4.31% from 4.53% in the preceding quarter, a decline of 22 basis points. The contraction reflected foreign-currency non-resident deposit mobilisation during the quarter.
Kotak’s foreign-currency non-resident deposit features describe term deposits available in US dollars, euros, British pounds, Australian dollars and Singapore dollars. The product allows both principal and interest to be repatriated.
The results illustrate the distinction between income growth and margin performance: a larger lending business can generate more net interest income even when the margin earned on assets narrows.
Bad-loan ratio improves alongside lending growth
The gross non-performing asset ratio declined to 1.04% at the end of September from 1.18% three months earlier. That represents a 14-basis-point improvement in the share of loans classified as non-performing.
The asset-quality comparison is sequential, whereas the loan, deposit and income growth figures compare with the same quarter a year earlier. Keeping those periods separate is important when assessing the strength of the quarter.
Conclusion
Kotak Bank profit benefited from business growth and lower provisions, while margin compression remained a counterweight. The next quarterly results will provide the next comparison of whether lending growth continues to offset that pressure.
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