This article explores the ﬁnancial results of Kotak Mahindra Bank for the quarter ended 30 September 2025 (Q2 FY26), assessing growth in assets, deposits and loans, analysing margin and proﬁt metrics, and evaluating asset-quality and risk signals. We also look at the implications for the bank’s future trajectory.

Growth in Customer Assets, Deposits and Loans

Kotak Mahindra Bank (KMB) has registered strong growth in its core franchise – loans and deposits – though margin pressure and increasing provisions have tempered its headline profitability. We begin by reviewing the key figures in tabular form.

Here are the key growth metrics for Q2 FY26:

Metric	Q2 FY26	Q2 FY25	Year-on-Year Change
Consolidated Customer Assets (advances + credit substitutes)	₹5,76,339 crore	₹5,10,598 crore	+13 %
Total Assets Under Management (AUM)	₹7,60,598 crore	₹6,80,838 crore	+12 %
Stand-alone Net Advances	₹4,62,688 crore	₹3,99,522 crore	+16 %
Average Total Deposits	~₹5,10,538 crore	—	+14 %
CASA Ratio (Current + Savings)	42.3 %	—	Stable/Moderately strong

These numbers illustrate that KMB continues to grow its balance sheet meaningfully, both in lending and deposit mobilisation. The CASA ratio, at over 40 %, supports a relatively favourable funding mix. On the AUM side, the bank’s non‐banking assets (such as mutual funds) also contribute to the overall scale.

Read More - How to Activate Net Banking in Kotak Mahindra Bank

Margins, Income and Profitability

While growth in assets is heartening, KMB faces challenges on the margin and profitability front. The following table summarises key operating metrics.

Metric	Q2 FY26	Q2 FY25	Comments
Net Interest Income (NII)	₹7,311 crore	₹7,020 crore	+4 % growth – modest given advances growth
Net Interest Margin (NIM)	4.54 %	4.91 %	Margin compressed by 37 bps YoY
Other Income	₹2,589 crore	₹2,684 crore	Declined ~3.5 % YoY
Operating Expenses	₹4,632 crore	₹4,605 crore	Roughly flat sequentially
Stand-alone Pat (Bank)	₹3,253 crore	₹3,344 crore	Down ~3 % YoY
Consolidated PAT	₹4,468 crore	₹5,044 crore	Down ~11 % YoY

In short, albeit strong growth in loans, the bank’s profitability is under pressure mainly due to margin compression and higher provisions. The NIM decline reflects the full impact of repo-cuts and deposit re-pricing lag going through the system. As a result, despite growth in NII, the slower growth in other income and elevated expenses weigh on the bottom line.

Asset Quality and Capital Adequacy

KMB’s asset‐quality indicators remain robust, but the bank is cautious in outlook given industry challenges.

Gross NPA (GNPAs) and Net NPA (NNPAs) stand at approximately 1.39 % and 0.32 % respectively. The provision coverage ratio is at about 77 %. Credit cost is around 0.79 % annualised in Q2. On the capital front, the bank had a Capital Adequacy Ratio (CAR) of 22.8 % and a Common Equity Tier-I (CET-I) of 21.8 % on a consolidated basis.

These numbers suggest a comfortable buffer for growth and risk‐absorption, though caution is required in view of potential headwinds from unsecured loan growth and margin squeeze.

Learn More - Kotak Mahindra Bank Shares Rally on Strong Loan and Deposit Growth in Q1

Outlook and Strategic Implications

The bank has reiterated its strategy of expanding at 1.5-2× nominal GDP growth, with particular focus on secured retail, SME & mid‐market segments. Depositrepricing and SA rate cuts should gradually help margins stabilise in H2 FY26. The unsecured segment (cards, personal loans, microfinance) remains selective and under watch for portfolio stress.

Key things to watch: whether deposit repricing settles, margin recovery occurs, and unsecured stress remains contained.

Conclusion

Kotak Mahindra Bank has delivered commendable growth in its loan book and deposit franchise in Q2 FY26, signalling ongoing franchise strength. Yet profitability has come under strain, primarily from margin compression and heightened provisions.

Asset-quality numbers remain healthy and capital buffers strong, which is positive. For investors and stakeholders, the near-term focus will be on margin improvement and risk discipline in new business segments.

If margins stabilise while growth remains healthy, the bank is well placed to rebound; but if the margin pressure persists or unsecured stress rises, the challenge could deepen.

In summary, KMB’s Q2 results reflect a strong growth engine that is currently navigating a less favourable margin environment, the coming quarters will determine how successfully it mitigates that challenge.

Other News Pages
Recent SME IPOs Saw Big Listing Gains, Then Quick Corrections	Shadowfax Gets SEBI Approval for ₹2,500 Crore IPO	Huge Profit for SGB Investors: RBI Announces Final Redemption Price & Date	Why RBI Is Buying More Gold and Reducing US Investments in 2025
Are State Loans Getting Costlier in 2025? RBI Issues Warning	Will Bank Loans Become Easier in 2025? Credit Normalisation Explained	PNB Plans ₹4 Lakh Crore Corporate Loan Expansion by 2026	Kerala’s New Home Protection Law: Will It Stop Banks from Taking Houses?
Banks Reduce Gold Loans as Prices Turn Volatile: Muthoot Finance	Are Indian Banks Making a Comeback in Corporate Lending? Latest Data Shows Yes	Good News for NBFCs and Infrastructure Loan Borrowers	Kotak Mahindra Bank Reports Q2 FY26 Performance
Why Indian Banks Are Increasing Corporate Lending Again	Unsecured Loans Are Becoming a Major Risk for Banks	RBI Plans New Relaxations for NBFC Infrastructure Loans	Is It Time to Redesign India’s Monetary Policy Framework?