Kotak Mahindra Bank Q2 FY26 Financial Performance and Asset Quality Review

Key Financial Highlights (Standalone) Profitability: Standalone Net Profit recorded a 2.7% YoY decline to ₹3,253 crore. Consolidated Net Profit stood at ₹4,468 crore. Core Income: Net Interest Income (NII) grew 4% YoY to ₹7,311 crore, supported by robust balance sheet growth. Margins: The Net Interest Margin (NIM) was maintained at a stable 4.54%. Operating Profit: Grew 3% YoY to ₹5,268 crore. Shareholder Value: Book Value Per Share (BVPS) increased significantly by 14% YoY, reaching ₹844. Balance Sheet and Growth Dynamics Advances: Standalone advances registered strong 16% YoY growth, reaching ₹462,688 crore. Deposits: Average total deposits expanded by 14% YoY to ₹510,538 crore. Funding Mix: The CASA ratio remained healthy at 42.3%, contributing to a stable funding base. Returns: Annualized Return on Assets (RoA) was 1.88%, and Return on Equity (RoE) was 10.38%. Asset Quality and Capitalization A primary strength this quarter was the sequential improvement in asset quality metrics: Gross NPA: Improved to 1.39% from 1.48% in Q1 FY26. Net NPA: Improved to 0.32% from 0.34% in Q1 FY26. Provisions: Stood at ₹947 crore, declining significantly from ₹1,208 crore in the preceding quarter (Q1 FY26), reflecting better credit quality. The bank’s capital position remains robust, providing a strong buffer for growth and regulatory changes: Basel III CAR: 22.1% CET1 Ratio: 20.9% Management Outlook Management highlighted that growth was supported by improving consumer demand. While noting stress in the retail commercial vehicle segment and maintaining a cautious stance on unsecured lending, the bank is exploring gradual expansion and remains open to strategically viable acquisition opportunities. The strong capital buffers position the bank favorably to absorb future provisioning requirements under the expected ECL (Expected Credit Loss) framework.