Kotak Mahindra Bank delivered impressive fourth-quarter results with net profit rising 13% to ₹4,027 crore for the quarter ended March 31, according to reports from The Hindu BusinessLine. The performance exceeded analyst expectations, with estimates having projected a profit of ₹3,737 crore. This strong showing reflects the bank's robust operational performance during the quarter, with the latest figures showing 17% quarter-on-quarter growth in addition to the year-on-year increase. The bank's consolidated net profit for Q4 FY26 stood at ₹5,423 crore, representing a 10% rise from ₹4,933 crore in the year-ago period. The bank's standalone net profit for FY26 declined 15% year-on-year to ₹14,008 crore compared to ₹16,450 crore in the previous year, though this decline was primarily due to the absence of a ₹3,803 crore pre-tax gain from the sale of its 70% stake in Kotak General Insurance to Zurich Insurance Company for ₹4,096 crore in the previous year.
While Kotak Mahindra Bank refrained from making a financial bid as part of the disinvestment process for IDBI Bank due to the latter's very high valuation, it remains open to reconsidering if the process is revived. "The bank evaluated every acquisition opportunity, including IDBI Bank, but found the valuation to be very, very high," said Ashok Vaswani, MD & CEO, KMB. He noted that after the disinvestment process was announced in 2022, IDBI Bank's stock rose sharply, boosting its valuation. The government's 2022 preliminary information memorandum had planned to sell 30.48% of the equity share capital by the Government of India and 30.24% by Life Insurance Corporation of India, along with transfer of management control. The disinvestment process fell through in March 2026 after offers received fell short of minimum price expectations, with Fairfax Financial and Emirates NBD believed to be front-runners for a majority stake. Vaswani emphasized that "even the bids received by the government were below the reserve price, reflecting the gap between expectations and market appetite."
AI cybersecurity risks are keeping CEO Ashok Vaswani awake at night, as he warned about the unprecedented nature of threats emerging from advanced AI systems. Speaking at the bank's March quarter earnings conference, Vaswani emphasized that "the nature of cyber risk is fundamentally changing. We have always been geared up to deal with cyber attacks at the speed of a human. Now we have to deal with cyber attacks at the speed of a machine." The bank is preparing teams to respond to AI-driven threats that could evolve at machine speed, requiring significant upgrades in response capabilities and vulnerability identification systems. Vaswani also noted that the bank is closely monitoring the second-order impact of geo-political developments and the El Nino weather pattern, while expressing confidence that there is no stress from the West Asia war.
The bank's net advances expanded 16% year-on-year in the quarter, primarily driven by retail and corporate loan growth, as reported by The Hindu BusinessLine. This significant loan expansion demonstrates strong demand in the Indian banking sector, with loan demand gaining momentum in the second half of the fiscal year as easing inflation and lower taxes supported household spending and corporate borrowing activities. The latest figures show loan growth reaching ₹4.96 lakh crore, reflecting the bank's continued focus on expanding its lending portfolio. As of March-end 2026, customer assets, which comprise advances and credit substitutes, grew to ₹5.46 lakh crore from ₹4.78 lakh crore a year ago. Total period-end deposits grew 15% year-on-year to ₹5.73 lakh crore in Q4FY26, with average total deposits growing to ₹5.38 lakh crore and average current deposits growing to ₹77,058 crore.
Net interest income increased 8% to ₹7,876 crore in the fourth quarter, representing the difference between interest earned on loans and interest paid on deposits, according to Upstox. Net interest margin (NIM) improved to 4.67% from 4.54% in the December quarter, though it fell on a yearly basis from 4.97% in Q4FY25. However, management expects net interest margins to soften gradually going forward as deposit repricing has largely played out. Other income, including non-fund based income, declined 2% year-on-year to ₹3,116 crore from ₹3,182 crore in the previous year. The bank's provisions for bad loans reduced by 43% to ₹516 crore as against ₹909 crore in the corresponding quarter last financial year, with credit cost on an annualized basis at 0.39% against 0.63% a quarter ago. Among subsidiaries, Kotak Mahindra Life Insurance reported a 24% year-on-year rise in net profit to ₹90 crore, while Kotak Securities reported a 15% year-on-year rise in profit to ₹400 crore, though Kotak Mahindra Prime reported a 19% year-on-year fall in net profit to ₹240 crore.
The bank demonstrated significant improvement in asset quality metrics during the quarter. Gross NPAs improved to 1.20% of total advances compared with 1.42% in the same period last year, with gross NPAs in absolute terms coming in at ₹6,018 crore from ₹6,134 crore. Net NPA position improved to 0.25% from 0.31%, while provisions and contingencies fell 43% year-on-year to ₹516 crore. The bank's board recommended a dividend of ₹0.65 per equity share for FY26. Looking ahead, the bank expects to grow its unsecured book in a calibrated manner with focus on existing customers, while acknowledging challenges from geo-political developments and weather patterns. The government is understood to have revived plans for the IDBI Bank disinvestment process, as foreign investors continue showing interest in buying large stakes in Indian banks and non-banking financial companies.
