Kotak Mahindra Bank, on July 26, reported a standalone net profit of Rs 3,282 crore during Q1 FY26, registering a 7 percent year-on-year decline from Rs 3,520 crore in Q1 FY25.
The net profit numbers come in after adjusting for the one-time gain from the sale of its general insurance business. Including the gain, the unadjusted net profit was significantly higher at Rs 6,250 crore.
According to the investor presentation, the decline in profit is primarily attributable to a substantial increase in provisioning and contingencies, which rose 109 percent year-on-year to Rs 1,208 crore.
The net interest income (NII) of Kotak Mahindra Bank rose by 6 percent year-on-year to Rs 7,259 crore, while the net interest margin (NIM) stood at a robust 4.65 percent. However, the cost-to-income ratio remained high at 46.19 percent, and the return on equity (ROE) moderated to 10.94 percent from 13.91 percent in the same quarter last year.
The bank’s asset quality showed a marginal deterioration, with gross non-performing assets (GNPA) rising to 1.48 percent from 1.39 percent a year ago. Net NPA (NNPA) stood stable at 0.34 percent. The CASA (Current Account Savings Account) ratio declined to 40.9 percent, compared to 43.4 percent in Q1FY25, reflecting a shift in the deposit mix.
Customer assets rose to Rs 4,92,972 crore, showing a 13 percent growth, while net advances increased by 14 percent to Rs 4,44,823 crore.
The bank’s capital adequacy ratio (CAR) stood at 23 percent and a CET-I ratio of 22.4 percent, above regulatory requirements.
On a consolidated basis, Kotak Mahindra Group reported a net profit of Rs 4,472 crore, reflecting a 1 percent increase from the previous year, excluding the one-time gain from the divestment of Kotak General Insurance (KGI) in Q1 FY25. The group’s return on equity stood at 11.13 percent and return on assets at 2.03 percent. The Group’s total assets under management (AUM) reached Rs 7.5 lakh crore, up 18 percent over the previous year.
Kotak’s subsidiaries performed well.
Kotak Asset Management Company (AMC) posted an 86 percent year-on-year jump in profit after tax to Rs 326 crore, driven by a 24 percent increase in average equity assets under management (AUM), which stood at Rs 3.33 lakh crore. Overall AUM rose to Rs 5.25 lakh crore, supported by strong SIP inflows of Rs 1,792 crore in June 2025 and a 57 percent share of individual investors in MAAUM, the presentation said.
Kotak Mahindra Prime, the vehicle and asset finance arm, reported a 17 percent year-on-year rise in PAT to Rs 272 crore. Its customer assets grew 16 percent year-on-year to Rs 41,469 crore, supported by both vehicle loans and other financing. The business maintained strong margins with a Return on Assets (ROA) of 2.4 percent and a Capital Adequacy Ratio (CAR) of 23.5 percent.
Kotak Securities recorded a 16 percent increase in PAT to Rs 465 crore in Q1 FY26. The company achieved an overall market share of 12.8 percent, including 10.1 percent in cash and 14.3 percent in derivatives.
Kotak Mahindra Life Insurance showed strong performance, with PAT up 88 percent year-on-year to Rs 327 crore. Gross written premium for the quarter stood at Rs 2,861 crore, while the AUM reached Rs 96,581 crore, reflecting 14.7 percent year-on-year growth. The solvency ratio remained strong at 2.40x, and 63.1 percent of individual regular premiums came from traditional products.
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