NEW DELHI: Kotak Mahindra Bank on Saturday reported a 26 per cent increase in consolidated net profit to Rs 5,645 crore for the September quarter of FY27, compared with Rs 4,468 crore in the same period last year, as higher income and a decline in provisions supported earnings.The private sector lender’s standalone net profit rose 29 per cent year-on-year to Rs 4,212 crore from Rs 3,253 crore.The bank also reported an improvement in asset quality during the quarter. Its gross non-performing assets (GNPA) ratio declined to 1.04 per cent from 1.39 per cent a year earlier, while the net NPA ratio fell to 0.24 per cent from 0.32 per cent.Fresh loan slippages decreased to Rs 1,230 crore from Rs 1,629 crore in the corresponding quarter last year. Provisions and contingencies were also lower, falling 15 per cent to Rs 803 crore.Additionally, it reported that its net interest income (NII) increased 16 per cent to Rs 8,459 crore from Rs 7,311 crore a year ago. Operating profit climbed 21 per cent to Rs 6,382 crore, while fees and services income grew 21 per cent to Rs 2,926 crore.The bank recorded a 25 per cent rise in net advances to Rs 5,77,295 crore as of September 30, 2026. Total deposits increased 23 per cent to Rs 6,51,491 crore.However, a significant part of this growth was linked to funds mobilised through the Foreign Currency Non-Resident (Bank) scheme. Excluding FCNR(B)-related loans and the portfolio acquired from Kotak Mahindra Investments, advances grew 19 per cent. Deposit growth stood at 13 per cent after excluding FCNR(B) deposits.Despite the increase in income, the bank witnessed pressure on its lending margins. Net interest margin (NIM) declined to 4.31 per cent from 4.54 per cent in the year-ago quarter and 4.53 per cent in the preceding quarter.The bank attributed the moderation largely to the mobilisation of around Rs 55,344 crore in FCNR(B) deposits under the Reserve Bank of India’s concessional swap facility. It also disbursed loans worth approximately Rs 16,110 crore through its international branches under the arrangement.The inflows affected the bank’s deposit mix, with its current account and savings account (CASA) ratio falling to 38.2 per cent from 42.3 per cent a year earlier. Excluding FCNR(B) deposits, the ratio stood at 41.8 per cent.Managing director and CEO Ashok Vaswani said the bank expects its net interest margins to remain stable during the rest of the financial year. While the deployment of funds raised through the FCNR(B) scheme could weigh on margins, the impact is expected to be offset by RBI rate hikes, given that around 60 per cent of the bank’s loan book is linked to the repo rate.The bank’s capital adequacy ratio stood at 21.9 per cent as of September 30, 2026, with its Common Equity Tier 1 (CET1) ratio at 21.4 per cent.
