Investor Update: Kotak Mahindra Bank Q3 FY26 Performance Review

Executive Summary Kotak Mahindra Bank delivered a resilient performance in Q3 FY26, characterized by significant improvements in asset quality and sustained double-digit balance sheet expansion. While the consolidated Profit After Tax (PAT) of ₹3,446 crore (+4.3% YoY) showed steady growth, the quarter was most notable for its disciplined risk management and robust capital positioning. Key Financial Highlights Profitability: Consolidated PAT rose 4.3% YoY. Annualized Return on Assets (ROA) and Return on Equity (ROE) stood at 2.10% and 11.39% respectively, reflecting stable return metrics. Core Income: Net Interest Income (NII) grew 5.1% YoY to ₹7,564 crore. Fee and service income also saw healthy traction, rising 8% YoY. Efficiency: Operating profit increased 4% YoY to ₹5,380 crore. The Cost-to-Income ratio was managed at 47.4% (excluding one-time regulatory impacts), while the average cost of funds improved, declining to 4.54% (vs 5.06% in Q3 FY25). Asset Quality & Risk Management The bank demonstrated superior underwriting standards with visible improvements across key metrics: NPA Compression: Gross NPA improved to 1.30% (down from 1.39% QoQ and 1.50% YoY). Net NPA remained low at 0.31%. Coverage: The Provision Coverage Ratio (PCR) stands strong at 76%, with annualized credit costs contained at 0.63%. Balance Sheet & Business Growth Credit Expansion: Standalone net advances grew 16% YoY to ₹4.80 lakh crore. Consolidated customer assets rose 15% YoY to ₹5.98 lakh crore. Deposit Franchise: Total deposits increased 15% YoY to ₹5.42 lakh crore, maintaining a healthy CASA ratio of 41.3%. Wealth Management: Domestic Mutual Fund AUM witnessed strong momentum, surging 20% YoY to ₹5.86 lakh crore. Capital Position & Strategic Outlook Solvency: The bank retains industry-leading capital buffers with a Consolidated Capital Adequacy Ratio (CAR) of 23.3% and a CET1 ratio of 22.4%.