Kotak Bank's Q2 profit climbs 26% while net interest margin slips
Kotak Mahindra Bank's consolidated net profit for the September quarter rose 26%, but its net interest margin fell to 4.31%, according to Moody's.
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what happened
Kotak Mahindra Bank posted a 26% jump in consolidated earnings for the quarter ending September, climbing to 5,645 crore rupees from 4,468 crore a year earlier. Moody's reports that strong lending growth, higher fee income and smaller provisions drove the result.
However, the net interest margin contracted by 23 basis points to 4.31% from 4.54%, as the share of cheap deposits in the funding base declined. The cost of funds, meanwhile, dropped 18 basis points to 4.52%.
At the standalone level, profit grew 29% to 4,212 crore rupees, and net interest income rose 16% to 8,459 crore rupees. Managing director Ashok Vaswani linked the margin decline to 55,000 crore rupees raised through FCNR(B) deposits during the quarter.
why it matters
Profit growth is coming from lending and fees rather than margins, which are under pressure from pricier funding. If the share of low-cost deposits does not recover, that could weigh on profitability in coming quarters. Investors will watch margin trends across the sector's upcoming results.
market impact
Kotak Mahindra Bank and Indian banks: stronger profit supports the stock, narrower margins weigh on it
tags
instruments
sources
- Kotak Bank Q2 Net Profit Jumps 26%, NIM Slips — Moody's, 25 October 2026 at 04:14 UTC
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