Kotak Mahindra Bank’s net interest income (NII) or core income rose 4% year-on-year to ₹7,311 crore in the second quarter, while other income fell 4% to ₹2,589 crore. | Photo credit: ADNAN ABIDI
Private sector lender Kotak Mahindra Bank on Saturday reported a 3 per cent year-on-year decline in net profit for the quarter ended September at ₹3,253 crore, mainly due to higher provisions, credit costs and tightening margins.
The bank’s net interest income (NII) or core income rose 4 per cent year-on-year to ₹7,311 crore in the second quarter, while other income fell 4 per cent to ₹2,589 crore. Net interest margin (NIM), a key indicator of profitability, stood at 4.54 percent in the second quarter, down from 4.65 percent in the first quarter, and is likely to rise 26 in the second half of the year if there are no further repo rate cuts, according to management.
Provisions and contingencies rose 43 percent year-on-year to ₹947 crore, and operating expenses stood at ₹4,632 crore, up 1 percent over the previous year. New derailments stood at ₹1,629 crore in the second quarter, down year-on-year and sequentially, while rehabilitation and upgrades stood at ₹688 crore. Depreciation rose to ₹1,099 crore in the second quarter, compared to ₹638 crore in the same period last year. Credit costs stood at 0.79 percent in the second quarter, down from 0.93 percent last quarter, and are expected to gradually decline in the second half of the year 26, the bank’s management said.
Overall, the gross and net non-performing asset ratio stood at 1.39 percent and 0.32 percent in September 2025, which is down from 1.49 percent and 0.43 percent respectively in September 2024. The bank has started witnessing better collection trends in unsecured personal loans and credit card business, but sees delinquencies increasing in the retail segment of commercial vehicle loans. Gradually, the bank aims to grow its unsecured loan portfolio by double digits, said MD & CEO Askok Vaswani.
The bank’s total deposits rose 14 per cent year-on-year to ₹5.10 lakh crore, while net advances rose 16 per cent to ₹4.62 lakh crore. The lender expects its advances per management to grow at 1.5 to 2 times nominal GDP growth.
Inorganic growth
Vaswani said the bank is looking at every inorganic growth opportunity that arises, but it is premature to say whether it is considering acquiring IDBI Bank.
“…In the area of inorganic growth, as you well know, we have the capital and our ambition is to grow. Frankly, it’s not just the bank, but also subsidiaries, whether it’s asset management, life insurance or securities, these are all areas where we want to grow. It’s about getting a lot more customers and scale, and if things are happy strategically, then it should make financial sense. If it’s strategic and makes financial sense, we would like to do these types of transactions…” Vaswani said.
Finally, the bank informed that the Reserve Bank of India (RBI) has approved the reappointment of CS Rajan, Independent Director on the bank’s board, as part-time Chairman for a further period from January 1, 2026 to October 21, 2027.
Published on October 25, 2025
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