Kotak Mahindra Bank has reported a 2.7 per cent decline in net profit to Rs 3,253 crore in the second quarter of FY2026, compared with Rs 3,344 crore in the same quarter of the previous year. 

The decline in profit comes at a time when the bank has shown no fluctuations in its performance regarding many necessary operational measures. Ahead of the results, the stock fell 1.29 per cent to close at Rs 2,192.50 on Friday, October 24.

How Was Net Interest Income?

The net interest income (NII) of the bank increased 4 per cent year on year to Rs 7,311 crore from Rs 7,020 crore in Q2FY25. The hike suggests strong lending performance by Kotak Mahindra and thus higher interest accruals, which made the bank’s primary source of revenue even more powerful amid the drop in net profit.

What Happened to the Bank’s Margins and Operating Profit?

Kotak Mahindra clocked a net interest margin (NIM) of 4.54 per cent in the quarter, while the cost of funds was 4.70 per cent. Operating profit rose 3 per cent YoY to Rs 5,268 crore, from Rs 5,099 crore in Q2FY25, demonstrating resilience in core operations.

How Robust Is the Bank’s Loan Book?

Net growth increased 16 per cent year-over-year to Rs 4,62,688 crore from Rs 3,99,522 crore in Q2FY25. The rise reflects sustained demand for credit in both retail and corporate segments.

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Is Asset Quality Improving?

The total non-performing assets (GNPA) of Kotak Mahindra Bank increased to 1.39 percent. In comparison, the net NPAs amounted to 0.32 percent, up from 1.49 percent and 0.43 percent, respectively, in the same quarter of the previous fiscal year. The bank's positive trend reflects its commitment to practical risk management and high-quality credit.

How Was Assets Under Management?

Total assets under management (AUM) increased 12 per cent year-on-year to Rs 7,60,598 crore. Domestic mutual fund equity AUM has grown by 14 percent year-over-year (YoY). It now amounts to Rs 3,62,694 crore, which has been interpreted as a sign of increasing investor interest in the investment solutions provided by Kotak.

The net profit of Kotak Mahindra Bank declined slightly. Still, the bank's underlying performance, in terms of NII, advances, operating profit, and AUM, remains relatively strong, suggesting that its operational strength remains intact.

Disclaimer: This is an informational article only. Investors are advised to consult a professional financial advisor before making any investment decisions.