Kotak Mahindra Bank Q1 earnings: Net profit rises 26% to ₹4,123 crore on lower provisions

Kotak Mahindra Bank, the country's leading private sector lender, on Saturday, July 18, reported a net profit of ₹4,123 crore in the first quarter of current financial year (Q1FY27), marking an increase of 26% from ₹3,282 crore in the same period last year.

The bank's profitability in April-June period got a boost from lower provisioning for bad loans as its provisions dropped 45% to ₹668 crore compared with ₹1,208 crore in the year-ago period.

Kotak Mahindra Bank's net interest income or difference between interest earned on loans and expended on deposits rose 9% annually to ₹7,928 crore compared with ₹7,259 crore in the corresponding period last year.

The bank's net interest margin (NIM) was 4.53% for Q1FY27 (4.65% for Q1FY26 and 4.67% for Q4FY26) and cost of funds was 4.46% for Q1FY27.

The bank's asset quality showed a slight improvement as its gross non-performing assets (NPAs), as a percentage of total advances, came in at 1.18% at the end of first quarter compared with 1.48% in the year-ago period.

In absolute terms, gross NPAs came in at ₹6,122 crore compared with ₹6,637 crore.

Its net NPAs stood at 0.27% as against 0.34%.

During the quarter net advances increased 15% annually to ₹5,12,249 crore compared with ₹4,44,823 crore.

Total period-end deposits grew to ₹5,72,820 crore at the end of first quarter, up 12% year-on-year (YoY) from ₹ 5,12,838 crore in the year-ago period. Average total deposits grew to ₹ 5,58,891 crore, up 14%, average current deposits grew by 15% to ₹78,107 crore and average fixed rate savings deposits grew to16% ₹1,25,061 crore.

The Mumbai-based lender added that its slippages at the end of first quarter declined by 27% to ₹1,321 crore from ₹1,812 crore.

Its retail banking unit which constitutes of home loans, credit cards and retail microcredit businesses rose 12% to ₹2,02,842 crore, institutional banking business rose 5% to ₹2,59,895 crore independent product business declined 2% to ₹64,873 crore.

At the end of Q1, the bank had a total network of 2,301 branches, 2,734 ATMs and 10 currency chests.

Kotak Mahindra Bank shares ended 3.57% higher at ₹389 a day ahead of its earnings announcement.