Mumbai, Oct 25 : Private sector lender Kotak Mahindra Bank on Saturday reported a 2.7 per cent year-on-year (YoY) decline in its net profit at Rs 3,253 crore for the July-September quarter (Q2 FY26).

The bank had posted a net profit of Rs 3,344 crore in the same period last year.

Despite the marginal dip in profit, the bank's net interest income (NII) rose 4 per cent (on-year) to Rs 7,311 crore from Rs 7,020 crore in Q2 FY25, while the net interest margin (NIM) stood at a healthy 4.54 per cent.

The lender's advances book expanded 16 per cent on-year to Rs 4,62,688 crore (as of September 30), from Rs 3,99,522 crore a year earlier, reflecting robust credit demand.

On the liabilities side, average total deposits grew 14 per cent (on-year) to Rs 5,10,538 crore, compared with Rs 4,46,110 crore in Q2 FY25. Average current deposits also rose 14 per cent to Rs 70,220 crore from Rs 61,853 crore in the corresponding quarter last year.

Asset quality saw further improvement, with the gross non-performing assets (GNPA) ratio declining to 1.39 per cent as of September 30, 2025, from 1.49 per cent a year ago.

The Net NPA (NNPA) ratio also improved to 0.32 per cent from 0.43 per cent in the same period. The bank's Provision Coverage Ratio (PCR) remained strong at 77 per cent.

According to its exchange filing, CASA ratio (as at September 30) stood at 42.3 per cent and Credit to Deposit ratio stood at 87.5 per cent. Standalone Return on Assets (ROA) for Q2 FY26 (annualised) was 1.88 percent while Return on Equity (ROE) was 10.38 percent on an annualised term.

/IANS