Kotak Mahindra Bank Q3FY26 Profit Rises 4.3% to ₹3,446 Crore

27 Jan 2026 , 11:07 AM

Kotak Mahindra Bank Ltd reported a consolidated net profit of ₹3,446 crore for Q3 FY26, registering a 4.3 percent year on year increase from ₹3,305 crore in the corresponding quarter last year. Operating profit for the quarter rose 4 percent year on year to ₹5,380 crore from ₹5,181 crore. Net interest income increased 5 percent year on year to ₹7,565 crore, while reported net interest income grew 5.1 percent to ₹7,564 crore.

Asset quality improved on a quarter on quarter basis during the period under review. Gross non performing assets moderated to 1.30 percent compared with 1.39 percent in Q2 FY26, while net non performing assets stood at 0.31 percent against 0.32 percent in the previous quarter. In absolute terms, net non performing assets were reported at ₹1,497 crore, marginally higher than ₹1,491 crore in the year ago period. Gross non performing assets declined to ₹6,320 crore from ₹6,479.5 crore recorded in the same period last year.

Consolidated customer assets, including advances and credit substitutes, grew 15 percent year on year to ₹5,98,780 crore as of December 31, 2025. Total customer assets under management on a consolidated basis also increased 15 percent year on year to ₹7,87,950 crore. Domestic mutual fund assets under management rose 20 percent year on year to ₹5,86,610 crore during the quarter.

Consolidated net worth stood at ₹1,75,251 crore at the end of the reporting period. Book value per share increased to ₹176 following the 1:5 share subdivision that became effective on January 14, 2026. Consolidated return on assets for Q3 FY26 on an annualised basis was reported at 2.10 percent, while return on equity stood at 11.39 percent.

On a standalone basis, net advances increased 16 percent year on year to ₹4,80,673 crore, while customer assets rose 15 percent year on year to ₹5,29,455 crore. Period end deposits grew 15 percent year on year to ₹5,42,638 crore, with the current account savings account ratio at 41.3 percent. The credit to deposit ratio stood at 88.6 percent, and the bank served a customer base of 5.1 crore during the quarter.

The average cost of funds declined to 4.54 percent in Q3 FY26 from 5.06 percent in Q3 FY25. Fee and service income increased 8 percent year on year to ₹2,549 crore. Operating expenses rose 8 percent year on year to ₹5,023 crore, including an estimated incremental cost of ₹96 crore due to the new Labour Code. Excluding this impact, operating expenses stood at ₹4,927 crore, with the cost to income ratio reported at 47.4 percent.

Standalone asset quality also improved compared with the year ago period, with gross non performing assets at 1.30 percent versus 1.50 percent and net non performing assets at 0.31 percent compared with 0.41 percent. The provision coverage ratio stood at 76 percent, while credit cost on an annualised basis was reported at 0.63 percent for Q3 FY26. Standalone return on assets on an annualised basis stood at 1.89 percent, and return on equity was reported at 10.68 percent.

Capital adequacy ratios remained strong during the quarter. Consolidated capital adequacy ratio stood at 23.3 percent, with common equity tier one ratio at 22.4 percent. On a standalone basis, capital adequacy ratio was reported at 22.6 percent and common equity tier one ratio at 21.5 percent, including unaudited profits. The average liquidity coverage ratio for the quarter stood at 135 percent.

The bank said its board of directors approved raising up to ₹15,000 crore through the issuance of unsecured, redeemable, non convertible debentures on a private placement basis during FY 2026 to FY 2027. The issuance may be undertaken in one or more tranches or series, subject to shareholder approval and other regulatory permissions as required.

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