Kotak Mahindra Bank (KOTAKBANK) Q1 25/26 earnings summary

Executive summary

• RBI estimates 6.5% GDP growth for FY2026; repo rates cut by 100 bps in six months, but credit demand remains subdued.

• Consolidated PAT for Q1FY26 at ₹4,472 crore, ROE at 11.13%, and ROA at 2.03%.

• Net advances and deposits grew 14% and 15% YoY, with a CASA ratio of 40.9%.

• Board approved unaudited financial results for Q1 FY26, reflecting the impact of the 70% divestment in the general insurance subsidiary.

• Strategic focus on customer-centric propositions, technology investments, and granular growth in SME and affluent segments.

Financial highlights

• Standalone PAT for the quarter was ₹3,282 crore, down 7% YoY due to higher credit costs; consolidated PAT at ₹4,472 crore.

• NIM for the quarter at 4.65%, down from 5.02% YoY, mainly due to repo rate cuts and product mix changes.

• Gross NPA at 1.48%, net NPA at 0.34%, and provision coverage ratio at 77%.

• Consolidated total income for Q1 FY26 was ₹26,703.92 crore, up from ₹25,075.87 crore in Q1 FY25.

• Group AUM grew 18% YoY to ₹7,50,000 crore; book value per share up 17% YoY to ₹829.

Outlook and guidance

• NIM expected to stabilize over the year as deposit repricing flows through; full impact of repo cuts to be seen in Q2.

• Focus on scaling digital offerings, ESG initiatives, and expanding customer reach.

• Credit costs in MFI and retail CV have peaked and are expected to decline; cards and personal loan credit costs have stabilized.

• Unsecured retail assets targeted to return to 15% of total assets over time, with MFI not exceeding 3-4%.

• Basel III Pillar 3 disclosures available online; no change in significant accounting policies during the quarter.