Kotak Mahindra Bank (KOTAKBANK) Q2 25/26 earnings summary

Executive summary

• Consolidated PAT for Q2FY26 was ₹4,468 crore, down 11% year-over-year, with 81% from bank and lending entities; ROE at 10.65%, ROA at 1.97%.

• Net advances grew 16% YOY to ₹462,688 crore; deposits increased 15% to ₹528,776 crore, mainly in secured business and SME/institutional segments.

• Consolidated AUM grew 12% YOY to ₹760,598 crore; customer assets rose 13% to ₹576,339 crore.

• Maintained strong capital adequacy at 22.1% (CET1: 20.9%) and consolidated book value per share up 14% YOY to ₹844.

• Continued investment in technology and digital platforms, with 44 new branches added in the quarter.

Financial highlights

• NIM for Q2FY26 at 4.54%, down from 4.91% YOY and 11 bps QOQ; cost of funds reduced by 31 bps.

• Credit costs declined to 79 bps, down 14 bps QOQ, with improvement in credit card and microfinance portfolios.

• Gross NPA ratio improved to 1.39% (from 1.48% QOQ and 1.49% YOY); net NPA at 0.32%.

• Operating expenses flat YOY and down 3% sequentially, aided by efficiency gains and lower retirement costs.

• Fees and services income grew 7.4% QOQ, led by distribution and debt syndication.

Outlook and guidance

• Expect NIM to gradually improve in H2 with deposit repricing and CRR benefits, assuming no further repo cuts.

• Credit costs projected to moderate further in H2, with focus on rebuilding retail unsecured business.

• Cautious stance maintained on retail CV segment due to ongoing stress.

• Focus remains on digital transformation, customer-centric propositions, and scaling diversified financial services.