Kotak Mahindra Bank Q2 Profit Rises 26% to ₹5,645 Crore as Asset Quality Improves

# Kotak Mahindra Bank Q2 Profit Rises 26% to ₹5,645 Crore as Asset Quality Improves

Kotak Mahindra Bank announced that its consolidated net profit grew by 26.3 percent compared with year reaching ₹5,645.38 crore for the July–September quarter of FY27. This growth was helped by net interest income, stronger fee income and lower provisions. Kotak Mahindra Banks standalone net profit also rose by 29.5 percent reaching ₹4,211.97 crore.

The results were approved by Kotak Mahindra Banks board on October 24 2026. They also showed that asset quality improved.. Kotak Mahindra Banks net interest margin (NIM) which measures lending profitability fell to 4.31 percent from 4.53 percent in the previous quarter.

Net Interest Income Increases 16%

Kotak Mahindra Banks standalone net interest income grew by 15.7 percent year on year reaching ₹8,458.97 crore, up from ₹7,311 crore in the quarter last year. Comparing with the quarter net interest income rose about 7 percent from ₹7,928 crore in Q1 FY27.

Kotak Mahindra Banks operating profit increased by 21 percent year on year reaching ₹6,382 crore. Fee and services income went up 21 percent to ₹2,926 crore. Provisions fell 15 percent to roughly ₹803 crore.

These numbers helped Kotak Mahindra Bank grow its earnings in the quarter.

Net Interest Margin Moderates

Even though net interest income was higher Kotak Mahindra Banks NIM fell to 4.31 percent from 4.53 percent in Q1 FY27 and 4.54 percent in the same quarter last year.

Kotak Mahindra Bank said that the slowdown was mainly due to the mobilisation of foreign‑currency non‑resident bank deposits, called FCNR(B) deposits.

Kotak Mahindra Bank gathered about ₹55,344 crore from these FCNR(B) deposits during the quarter. Gave out loans of roughly ₹16,110 crore through its international branches. This funding activity helped the bank grow its deposits and advances.

Asset Quality Shows Improvement

Kotak Mahindra Banks gross non‑performing asset ratio fell to 1.04 percent as of September 30 2026 down from 1.39 percent a year. Net non‑performing assets dropped to 0.24 percent from 0.32 percent.

Loan slippages declined by 24 percent year on year reaching ₹1,230 crore and provisions fell to about ₹803 crore from ₹947 crore in the quarter last year.

These figures show that Kotak Mahindra Banks asset‑quality indicators improved and that provisioning expenses were lower during the period.

Loan and Deposit Growth

Kotak Mahindra Banks standalone net advances grew by 25 percent year on year reaching ₹5.77 lakh crore. Deposits rose around 23 percent to ₹6.51 lakh crore.

But when Kotak Mahindra Bank removed FCNR(B) balances and the loan portfolio bought from Kotak Mahindra Investments, the adjusted growth rates were lower. Advances grew 19 percent on this adjusted basis and deposit growth was around 13 percent. This distinction matters when evaluating Kotak Mahindra Banks underlying business growth apart from the quarters funding activity and portfolio changes.

What to Watch Next

Kotak Mahindra Banks Q2 results show earnings and improving asset‑quality ratios. Investors will keep watching Kotak Mahindra Banks interest margins, deposit composition, credit growth and provisions, in future quarters.

Whether Kotak Mahindra Bank can keep its earnings growth will partly depend on how it uses new deposits controls funding costs and keeps asset quality high.