Kotak Mahindra Bank (NSE: KOTAKBANK) reported a 26% year-on-year rise in consolidated profit after tax to Rs 5,645 crore for the second quarter of FY27, backed by a 16% increase in net interest income to Rs 8,459 crore, according to an exchange filing reported by economictimes.indiatimes.com.
Financial Highlights And Asset Growth
Here is the math behind the private sector lender’s performance for the quarter ending September 30, 2026. Consolidated profit after tax reached Rs 5,645 crore, marking a 3% sequential increase from Rs 5,480 crore in Q1FY27. On a standalone basis, net profit grew 29% year-on-year to Rs 4,212 crore. Meanwhile, net interest income rose 7% quarter-on-quarter from Rs 7,928 crore.
The bank’s consolidated customer assets—comprising advances, inter-bank participation certificates, bills rediscounting, and credit substitutes—expanded 21% year-on-year to Rs 6,99,250 crore. Consolidated customer assets under management increased 8% to Rs 8,14,118 crore, while total domestic mutual fund assets under management grew 10% to Rs 6,15,679 crore.
| Metric (Q2 FY27) | Amount | YoY Change |
|---|---|---|
| Consolidated PAT | Rs 5,645 crore | +26% |
| Standalone PAT | Rs 4,212 crore | +29% |
| Net Interest Income (NII) | Rs 8,459 crore | +16% |
| Consolidated Customer Assets | Rs 6,99,250 crore | +21% |
| Consolidated Net Worth | Rs 1,94,706 crore | N/A |
Margin Pressures And Foreign Deposit Inflows
But the balance sheet tells a different story regarding lending margins. Fortuneindia.com noted that the bank’s net interest margin moderated to 4.31% from 4.54% in the year-ago quarter and 4.53% in Q1 FY27. The lender attributed this compression directly to increased liquidity stemming from foreign currency non-resident bank deposit inflows.
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During the September quarter alone, the bank mobilised Rs 55,344 crore via these foreign currency deposits. This liquidity build-up expanded average total deposits by 19% to Rs 6.06 lakh crore. Consequently, the current account and savings account ratio contracted to 38.2% from 42.5% a year earlier as term deposits expanded.
Asset Quality And Capital Adequacy Ratios
Asset quality metrics registered measurable improvements across the board. The gross non-performing asset ratio declined to 1.04% as of September 30, 2026, improving from 1.39% a year earlier. In absolute terms, gross non-performing assets dropped to Rs 6,080.97 crore, while net non-performing assets stood at Rs 1,366.94 crore.
Consolidated provisions and contingencies decreased to Rs 820.43 crore from Rs 1,054.42 crore in the same period last year. On the capital front, the bank maintained a Basel III capital adequacy ratio of 22.4% with a Common Equity Tier 1 ratio of 22.1%, alongside an average liquidity coverage ratio of 137.4%.
Market Performance Ahead Of Trading Sessions
Prior to the earnings release, the lender’s shares settled 1.49% lower at Rs 430.50 apiece on the National Stock Exchange on Friday, October 23, compared with a previous close of Rs 437. Stock data indicates the equity has declined 2.94% over the calendar year, bringing the bank’s market capitalisation to Rs 4,28,256.29 crore.
Book value per share advanced 16% year-on-year to Rs 196, reflecting the equity share subdivision executed in January 2026. Annualised return on assets for the quarter stood at 2.10%, with an annualised return on equity of 11.70%.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
