Kotak Mahindra Bank reported a 26% year-on-year rise in standalone net profit to ₹4,123 crore for the first quarter of FY27, aided by steady growth in net interest income (NII), healthy loan expansion and a sharp decline in credit provisions.
The bank had posted a profit after tax (PAT) of ₹3,282 crore in the corresponding quarter of the previous financial year.
Core income remains strong
The lender’s Net Interest Income (NII) increased 9% year-on-year to ₹7,928 crore, compared with ₹7,259 crore in Q1 FY26.
However, the Net Interest Margin (NIM) moderated to 4.53% from 4.65% a year ago, reflecting changes in the interest rate environment. The bank’s cost of funds improved significantly to 4.46%, compared with 5.01% in the year-ago period.
Fee and services income grew 11% to ₹2,500 crore, underscoring healthy momentum in non-interest revenue.
Operating efficiency improves
Operating expenses rose 8% year-on-year to ₹5,135 crore, while the bank continued to improve efficiency, with the cost-to-assets ratio declining to 2.66% from 2.83% a year earlier.
Provisions fell sharply by 45% to ₹668 crore, compared with ₹1,208 crore in Q1 FY26, resulting in a significantly lower annualised credit cost of 0.46%, against 0.93% in the corresponding quarter last year.
Loan book expands 15%
Kotak Mahindra Bank maintained strong business momentum during the quarter.
Net advances grew 15% year-on-year to ₹5.12 lakh crore, while customer assets, comprising advances, IBPC, BRDS and credit substitutes, increased 16% to ₹5.71 lakh crore.
On the liabilities side, period-end deposits rose 12% to ₹5.73 lakh crore, while average deposits increased 14% to ₹5.59 lakh crore.
Average current deposits grew 15%, average fixed-rate savings deposits increased 16%, and average term deposits rose 14%, reflecting a well-diversified funding base.
The bank’s CASA ratio remained healthy at 40.3% as of June 30, 2026, compared with 40.9% a year earlier.
The credit-to-deposit ratio improved to 89.4%, from 86.7% in the corresponding period last year.
Kotak Mahindra Bank’s customer base reached 5 crore as of June 30, 2026.
Asset quality strengthens
The bank reported continued improvement in asset quality during the quarter.
Gross Non-Performing Assets (GNPA) declined to 1.18% from 1.48% a year ago, while Net NPA improved to 0.27% from 0.34%.
Fresh slippages declined 27% year-on-year to ₹1,321 crore, compared with ₹1,812 crore in Q1 FY26.
The provision coverage ratio improved to 78%, up from 77% a year earlier, reflecting the bank’s prudent provisioning approach.
Capital position remains robust
Kotak Mahindra Bank continued to maintain a strong capital base, with its Basel III Capital Adequacy Ratio at 22.8% and Common Equity Tier-I (CET1) ratio at 22.4% as of June 30, 2026.
The bank reported an annualised Return on Assets (ROA) of 2.14% and Return on Equity (ROE) of 11.98% during the quarter, highlighting sustained profitability and balance sheet strength despite a competitive operating environment.