Kotak Mahindra Bank Q1 FY26 Profit Falls 7% Despite Solid NII Growth

Kotak Mahindra Bank on Saturday reported a net profit of ₹3,282 crore in the first quarter of FY26, nearly 7% decline from ₹3,520 crore in the same period of the previous fiscal year. The reported net profit reflects figures adjusted for a one-time gain from the sale of its general insurance arm.

Without this adjustment, the headline profit significantly surged to ₹6,250 crore. The bank also attributed a decline in profit to a substantial increase in provisioning and contingencies, which increased 109 year-on-year to ₹1,208 crore.

The net interest income (NII) grew 6% year-on-year to ₹7,259 crore, while the net interest margin (NIM) stood at a robust 4.65%. However, the cost-to-income ratio was at 46.19% and the return on equity (ROE) was slightly up at 10.94% - down from 13.91% in the year-ago quarter.

Its asset quality deteriorated marginally as the bank’s gross non-performing assets rose to 1.48% from 1.39% a year ago. On the other hand, its net non-performing assets remained steady at 0.34%.

However, the CASA (current account savings account) ratio slipped to 40.9%, compared to 43.4% in Q1 FY25. These figured reflects a shift in the deposit mix of Kotak Mahindra Bank. The bank’s CAR (capital adequacy ratio) was at 23% and a CET-I ratio of 22.4%.

Kotak Mahindra Bank reported stable asset quality, with net NPAs holding at 0.34%. Meanwhile, the CASA ratio declined to 40.9%, down from 43.4% in the same quarter last year, suggesting a change in depositor preference.

Its customer assets rose 13% year-on-year to ₹4,92,972 crore, while net advances registered a 14% growth, reaching ₹4,44,823 crore.

How Kotak’s Subsidiaries Performed?

Its asset management arm, AMC, reported 86% jump in profit after tax to ₹326 crore. It is driven by a 24% increase in average equity assets under management, which stood at ₹3.33 lakh crore.

AMC’s total assets under management (AUM) climbed to ₹5.25 lakh crore, driven by robust SIP contributions of ₹1,792 crore in June 2025 and a healthy 57% participation from individual investors in the monthly average AUM.

On the other hand, Kotak’s vehicle and asset finance arm reported a 17% year-on-year rise in PAT to ₹272 crore. And customer assets grew 16% year-on-year to ₹41,469 crore. The bank had attributed this to vehicle loans and other financing.

Kotak Securities also witnessed 16% rise in PAT to ₹465 crore in Q1 FY26. The company achieved an overall market share of 12.8%. And its insurance arm (Kotak Mahindra Life Insurance) also showed strong performance with PAT up 88% year-on-year to ₹327 crore.