Kotak Mahindra Bank Q3FY26 Results: Standalone Profit Rises 4%, NII Grows 5%
Kotak Mahindra Bank delivered a steady financial performance in the third quarter of FY26, supported by consistent growth in its core lending operations, improving asset quality, and healthy balance sheet metrics. The private sector lender reported moderate profit growth amid stable margins and robust expansion in advances and deposits.
Profit Performance
For Q3FY26, Kotak Mahindra Bank posted a standalone net profit of Rs 3,446 crore, registering a 4% year-on-year (YoY) increase compared with Rs 3,305 crore in the corresponding quarter last year.
On a consolidated basis, profit after tax (PAT) stood at Rs 4,924 crore, reflecting a 5% YoY growth and a 10% sequential rise over Rs 4,468 crore reported in Q2FY26.
Net Interest Income and Margins
The bank’s core income remained resilient during the quarter. Net interest income (NII) rose 5% YoY to Rs 7,565 crore, compared with Rs 7,196 crore in Q3FY25. On a quarter-on-quarter basis, NII increased by 3% from Rs 7,311 crore.
Net interest margin (NIM) for the quarter stood at 4.54%. While this was lower than 4.93% recorded a year earlier, margins remained flat sequentially, indicating stability despite a changing interest rate environment.
Asset Quality Improves Further
Kotak Mahindra Bank continued to strengthen its asset quality metrics. As of December 31, 2025:
- Gross NPA ratio improved to 1.30% from 1.50% a year ago
- Net NPA declined to 0.31% from 0.41%
- Provision Coverage Ratio (PCR) stood at 76%
Provisions for the quarter amounted to Rs 810 crore, lower than Rs 947 crore in the previous quarter. The annualised credit cost reduced to 0.63%, reflecting better credit performance.
Advances, Deposits, and CASA
Net advances grew strongly by 16% YoY to Rs 4,80,673 crore. Customer assets, including advances and credit substitutes, increased 15% YoY to Rs 5,29,455 crore.
Total deposits stood at Rs 5,42,638 crore, marking a 15% YoY growth. Average deposits also rose 15% to Rs 5,26,025 crore.
- Average current deposits grew 14% YoY to Rs 75,596 crore
- Average savings deposits increased 12% YoY to Rs 1,18,505 crore
- Average term deposits surged 19% YoY to Rs 3,18,070 crore
The CASA ratio as of December 31, 2025, stood at a healthy 41.3%.
Capital Position and Returns
The bank maintained a strong capital buffer, with a Capital Adequacy Ratio of 22.6% under Basel III norms. The CET1 ratio stood at 21.5%, including unaudited profits.
For the quarter, Kotak Mahindra Bank reported an annualised Return on Assets (ROA) of 1.89% and a Return on Equity (ROE) of 10.68%.
Fund Raising Plan
In a strategic move to strengthen its funding base, the bank’s board approved a proposal to raise up to Rs 15,000 crore through the issuance of unsecured, redeemable, non-convertible debentures (NCDs) via private placement during FY27, subject to necessary approvals.
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