- Kotak Mahindra Bank's Q2 net profit rose 29.48% YoY to Rs 4,212 crore
- Net interest income increased 15.7% YoY to Rs 8,459 crore in Q2 FY27
- Gross NPA ratio declined to 1.04%, net NPA to 0.24% in the quarter
Kotak Mahindra Bank reported better-than-expected standalone results for the September quarter of fiscal 2027, with the net profit rising 29.48% year-on-year to Rs 4,212 crore. Asset quality also improved, with gross and net non-performing asset ratios declining both sequentially and annually.
Net Interest Income Rises 15.7%
Net interest income of the private sector bank rose 15.7% year-on-year to Rs 8,459 crore from Rs 7,311 crore in the year-ago quarter. It increased 6.7% sequentially as well.
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Net profit stood at Rs 4,211.97 crore, compared with Rs 3,253 crore a year earlier, marking a 29.48% increase and also beating the street estimate of Rs 4,128 crore.
Pre-provision operating profit rose 21.15% year-on-year to Rs 6,382 crore from Rs 5,268 crore.
Net interest margin moderated to 4.31% from 4.53% in the previous quarter, a decline of 22 basis points. It was down 23 basis points from the year-ago level.
The bank attributed the moderation largely to the mobilisation of foreign currency non-resident bank or FCNR(B) deposits. It mobilised Rs 55,344 crore through these deposits and provided loans worth Rs 16,110 crore from the funds raised.
Also during the quarter, the cost of funds increased to 4.52% from 4.46% recorded in the previous quarter.
Asset Quality Improves, Slippages Decline
Gross non-performing assets of the private sector lender declined to 1.04% from 1.18% in the previous quarter, a reduction of 14 basis points. The ratio was down 35 basis points year-on-year. Net NPA stood at 0.24%, down three basis points sequentially and eight basis points from a year-ago period.
Both the ratios were better than the street estimates, with gross NPA expected at 1.15% and net NPA at 0.27%.
Fresh slippages declined to Rs 1,230 crore from Rs 1,321 crore in the previous quarter, a sequential decrease of about 7%. They were down from Rs 1,629 crore a year earlier.
The private sector bank reported the fee and services income at Rs 2,926 crore, up 21% year-on-year from Rs 2,415 crore.
The cost-to-assets ratio improved to 2.40% from 2.66% in the previous quarter.
However, the current account and savings account or CASA ratio stood at 38.2%, compared with 42.3% a year earlier, mainly due to the impact of the inflow of FCNR(B) deposits. Without the FCNR(B) deposits, the CASA ratio stood at 41.8% for the quarter.
Speaking to NDTV Profit, Kotak Mahindra Bank said, the 15bps drop was due to FCNR (B) in NIMs, while tractor and CV portfolio quality is quite good. The lender assured that it is watchful of El Nino situation. It further mentioned that it is seeing good traction on credit card spends, while market share in credit card spends is small but franchise strength is very high.
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