Kotak Mahindra Bank Q1 results: Profit drops 7% to ₹3,282; NII up 6%

Kotak Mahindra Bank has reported a standalone net profit of ₹3,282 crore for the first quarter ended June 30, 2025 (Q1 FY26), down 7% year-on-year (YoY) from ₹3,520 crore in the same period last year. This figure excludes a one-time gain from the sale of its stake in general insurance arm, Kotak Mahindra General Insurance Company, to Zurich Insurance Company. Including the divestment gain, unadjusted net profit stood at ₹6,250 crore.

On June 18, 2024, Zurich Kotak General Insurance (ZKGI) has ceased to be a wholly-owned subsidiary and became an associate of the bank, the lender said in an exchange filing today.

The dip in profit was largely due to higher provisioning for potential credit losses, though operational metrics remained resilient. Net interest income (NII) rose 6% YoY to ₹7,259 crore, up from ₹6,842 crore in Q1FY25, while net interest margin (NIM) stood at 4.65%.

The operating profit of the private lender increased 6% YoY to ₹5,564 crore from ₹5,254 crore in Q1 FY25, supported by stable growth in core income. Fee and services income came in at ₹2,249 crore, marginally higher than ₹2,240 crore a year ago.

Net advances stood at ₹4,44,823 crore as of June 30, 2025, up from ₹3,89,957 crore in the same period last year. Within the loan book, unsecured retail advances, including retail microcredit, accounted for 9.7% of net advances.

On a consolidated basis, Kotak Mahindra Group reported a net profit of ₹4,472 crore, up 1% from the previous year, excluding the one-time gain from the divestment of Kotak General Insurance. 

Consolidated customer assets, comprising advances (including IBPC and BRDS) and credit substitutes, rose 13% YoY to ₹5,57,369 crore as of June 30, 2025, compared to ₹4,94,105 crore in the year-ago period. The group's total AUM grew 18% YoY to ₹7,50,143 crore, while domestic mutual fund equity AUM rose 22% YoY to ₹3,57,323 crore.

Kotak Mahindra Bank’s asset quality remained broadly stable. Gross non-performing assets (GNPA) stood at 1.48% as of June 30, 2025, compared to 1.39% a year ago, while net NPA (NNPA) was nearly unchanged at 0.34%. The bank maintained a provision coverage ratio (PCR) of 77% during the quarter under review.

As of June 30, 2025, the bank's capital adequacy ratio (CAR), as per Basel III norms, stood at 23%, with a common equity tier 1 (CET1) ratio of 21.8%, including unaudited profits. Return on assets (ROA) for Q1FY26 (annualised) stood at 1.94%, while return on equity (ROE) came in at 10.94%, down from 13.91% in Q1FY25.

Kotak Mahindra Bank’s customer base grew to 5.4 crore as of June 30, 2025, up from 5.1 crore a year earlier, the release noted.