Mumbai: Kotak Mahindra Bank has reported a robust financial performance for the March quarter of FY26, registering a 13.4 per cent year-on-year rise in net profit to Rs 4,026.55 crore.
The bank also announced a dividend of Rs 0.65 per equity share of face value Re 1, signalling confidence in its financial stability and consistent growth.
The latest earnings reflect steady operational performance, improved asset quality, and continued growth in advances, even as the bank navigates a dynamic economic environment.
Kotak Mahindra Bank's net interest income (NII), a key indicator of core banking performance, rose by 8.1 per cent year-on-year to Rs 7,876 crore, compared to Rs 7,284 crore in the same quarter last year. The growth in NII was supported by a rise in lending activity and improved cost efficiency.
However, the bank reported a slight moderation in net interest margin (NIM). For Q4FY26, NIM stood at 4.67 per cent, down from 4.97 per cent in Q4FY25, though it improved sequentially from 4.54 per cent in Q3FY26. For the full financial year FY26, NIM came in at 4.60 per cent, compared to 4.96 per cent in FY25.
The decline in margins indicates pressure from changing interest rate cycles, although the bank managed to partially offset this through efficient cost management.
The bank's asset quality witnessed notable improvement during the quarter. Gross non-performing assets (NPAs) declined to 1.20 per cent, compared to 1.30 per cent in the previous quarter and 1.42 per cent in the corresponding period last year.
Net NPAs also improved, easing to 0.25 per cent from 0.31 per cent quarter-on-quarter. This indicates better recovery mechanisms and prudent lending practices adopted by the bank.
Additionally, slippages for Q4FY26 declined significantly by 32 per cent year-on-year to Rs 1,018 crore, down from Rs 1,488 crore in the same quarter last year. The reduction in slippages reflects improved credit monitoring and risk management strategies.
Kotak Mahindra Bank reported a 7 per cent year-on-year increase in operating profit for the March quarter, reaching Rs 5,855 crore compared to Rs 5,472 crore a year earlier. On a sequential basis, operating profit rose 9 per cent from Rs 5,380 crore in Q3FY26.
For the full financial year FY26, operating profit increased by 5 per cent year-on-year to Rs 22,067 crore, up from Rs 21,006 crore in FY25.
The bank also demonstrated improved cost efficiency, with the cost of funds declining to 4.45 per cent in Q4FY26, compared to 5.09 per cent a year ago and 4.54 per cent in the previous quarter. For the full year, the cost of funds stood at 4.67 per cent, down from 5.10 per cent in FY25.
This reduction highlights the bank's ability to manage its liabilities effectively and optimise funding sources.
On the business growth front, Kotak Mahindra Bank reported a strong expansion in its loan book. Net advances grew by 16 per cent year-on-year to Rs 4,96,009 crore as of March 31, 2026, compared to Rs 4,26,909 crore a year earlier.
The steady growth in advances reflects healthy demand across retail and corporate segments, along with the bank's continued focus on expanding its customer base.
The overall performance indicates that the bank has maintained a balanced approach between growth and risk management, ensuring stability in a competitive banking environment.
The board's recommendation of a dividend of Rs 0.65 per share underscores the bank's commitment to delivering value to shareholders while maintaining adequate capital for future growth.
Kotak Mahindra Bank's consistent financial performance, coupled with improving asset quality and steady expansion in lending, positions it well for sustained growth in the coming quarters.
The March quarter results highlight Kotak Mahindra Bank's resilience and operational strength. Despite some pressure on margins, the bank has delivered solid profit growth, improved asset quality, and maintained strong business momentum.
With better control over costs, reduced NPAs, and steady advances growth, the bank appears well-equipped to navigate future challenges while continuing to generate value for its stakeholders.