Kotak Mahindra Bank reported a mixed performance in Q2 FY26

The bank’s net profit fell 2.7% year-on-year to ₹3,253.3 crore, compared to ₹3,343.7 crore in the same quarter last year. Despite the decline in bottom-line, the bank managed to deliver growth in its core operations — net interest income (NII) rose 4.1% YoY to ₹7,310.7 crore from ₹7,019.6 crore, supported by healthy credit growth and stable margins. However, the quarter was marked by a notable surge in provisioning. Provisions and contingencies jumped 43.5% to ₹947.4 crore against ₹660.4 crore a year ago, primarily reflecting higher coverage for stressed assets and a prudent risk management stance. This spike in provisions offset the gains from NII growth and kept profit expansion muted. The Net Interest Margin (NIM) remained healthy but showed mild compression sequentially, indicating some pressure from deposit cost repricing. On the asset quality front, Kotak Bank showcased improvement, reinforcing its reputation for maintaining a robust balance sheet. Gross Non-Performing Assets (NPA) eased to 1.39% from 1.48% in the previous quarter, while Net NPA improved to 0.32% versus 0.34% QoQ. The continued decline in NPAs highlights effective recoveries and strong underwriting discipline. The bank’s credit cost remained well-contained despite elevated provisioning, reflecting conservative risk buffers in an uncertain macro environment. Kotak’s loan book grew steadily, led by retail and SME lending, while deposits also expanded at a healthy pace, helping maintain liquidity strength. Fee income saw a moderate uptick, driven by increased retail activity and digital adoption. In summary, Kotak Mahindra Bank’s Q2 FY26 results reflect stable operating momentum with strong asset quality, though profitability was impacted by higher provisions. The bank’s focus on disciplined growth, robust risk management, and digital-led efficiency continues to support its long-term outlook, even as near-term margins and earnings remain under pressure.