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View Promises →Kotak Mahindra Bank Limited — Q4 FY26
Kotak Mahindra Bank reported a solid Q4 FY26 with consolidated PAT of INR 5,238 crore (up 6% QoQ), driven by strong NIM of 4.67% and sharp improvement in credit cost to 39 bps (from 63 bps in Q3).
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Kotak Mahindra Bank reported a solid Q4 FY26 with consolidated PAT of INR 5,238 crore (up 6% QoQ), driven by strong NIM of 4.67% and sharp improvement in credit cost to 39 bps (from 63 bps in Q3). Advances grew 16% YoY led by SME and mortgages, while deposits grew 15% with CASA at 43.3%. The bank highlighted normalization of unsecured stress and a watchful stance on geopolitical risks (West Asia crisis) and a below-normal monsoon. Management guided for gradual NIM compression in FY27, offset by improving fee income and cost efficiencies. Key risk: potential second-order effects from geopolitical tensions and El Niño on rural and low-income segments.
कोटक महिंद्रा बैंक ने वित्त वर्ष 2026 की चौथी तिमाही में अच्छा प्रदर्शन किया। बैंक का कुल मुनाफा 5,238 करोड़ रुपये रहा, जो पिछली तिमाही से 6% अधिक है। इसकी मुख्य वजह ब्याज से कमाई (NIM) 4.67% रहना और खराब कर्ज पर कम खर्च (क्रेडिट कॉस्ट) 0.39% होना है, जो पिछली तिमाही के 0.63% से बेहतर है। बैंक ने छोटे-मध्यम उद्योगों और गृह ऋणों के कारण कर्ज में 16% और जमा में 15% की वृद्धि दर्ज की। बैंक ने कहा कि असुरक्षित कर्ज पर दबाव कम हुआ है, लेकिन पश्चिम एशिया संकट और कम बारिश जैसे जोखिमों पर नजर रखी जाएगी। अगले वित्त वर्ष में ब्याज से कमाई थोड़ी घट सकती है, लेकिन फीस और लागत बचत से इसकी भरपाई होगी।
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Net Interest Margin (NIM)
4.67%
+13bps QoQ
NIM improved sequentially to 4.67% in Q4, aided by lower number of days; normalized NIM was 4.54%.
Credit Cost
39 bps
-24bps QoQ
Credit cost improved sharply from 63 bps in Q3 to 39 bps in Q4, reflecting lower slippages and better collections.
CASA Ratio
43.3%
Flat YoY
CASA ratio remained resilient at 43.3% as of March 2026, supported by strong growth in low-cost deposits.
Unsecured Retail Mix
8.9%
Flat QoQ
Unsecured retail advances as a proportion of net advances remained stable at 8.9% for the last two quarters.
What Changed vs Last Quarter
NEW
NIM to decline gradually in FY27
Management expects NIM to reduce gradually in FY27, with the reduction more pronounced in the second half, but at a much slower pace than the 36 bps drop in FY26.
NEW
Credit cost to remain lower
Credit cost is expected to remain lower, driven by improved collection efficiency and tighter underwriting, especially in unsecured segments.
NEW
Cost-to-asset ratio to improve further
Management expects continued improvement in cost-to-asset ratio through fixed cost reduction and automation, building on the 27 bps improvement in FY26.
DROPPED
Moderate NIM improvement in Q4
Management expects NIM to increase moderately in Q4 due to full-quarter benefit of CRR cuts and seasonal aberrations, assuming no further rate cuts.
DROPPED
Credit cost to gradually decline further
Credit cost expected to continue its downward trend in Q4 and Q1, though at a moderated pace, with retail CV stress plateauing.
DROPPED
Cost-to-asset ratio target of 2.5%-2.6%
Management aims to maintain cost-to-asset ratio in the range of 2.5%-2.6% over the medium term, driven by fixed cost control and digitization.
DROPPED
Unsecured retail loan growth to resume
Personal loan book expected to return to growth in coming quarters as organic disbursements pick up, while credit card spend growth to follow.
NEW RISK
Geopolitical tensions and West Asia crisis
The West Asia crisis and Strait of Hormuz disruptions could impact supply chains, oil prices, and inflation, potentially affecting credit quality at the lower end.
NEW RISK
Below-normal monsoon risk
IMD's forecast of a below-normal monsoon due to El Niño could stress rural income and impact asset quality in tractor and microfinance portfolios.
NEW RISK
NIM compression from rising TD rates
The bank has increased term deposit rates (peak 6.8%) to lock in longer-tenure deposits, which could pressure NIMs in the second half of FY27.
NEW RISK
Panchkula branch investigation
An ongoing law enforcement investigation into a Panchkula branch embezzlement case could lead to reputational or financial impact, though management says provisions are adequate.
RISK GONE
Retail CV segment stress
Management continues to cautiously monitor the retail commercial vehicle segment, which has shown elevated stress; tighter underwriting and reduced disbursements are in place.
RISK GONE
Hardening of term deposit rates
CFO noted that term deposit rates have inched up in early January, and liquidity tightening could pressure cost of funds in Q4.
RISK GONE
ECL provisioning impact
Draft ECL circular could require additional provisions; management estimates impact at less than 2% of net worth, but final circular may differ.
RISK GONE
Fee income growth lagging loan growth
Core fee income growth has been weaker than loan growth; management attributes it to muted credit card fees and expects gradual improvement.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY25, Q2 FY26, Q3 FY26
Management continues to cautiously monitor the retail commercial vehicle segment, which has shown elevated stress; tighter underwriting and reduced disbursements are in place.
Mentioned in Q3 FY25, Q3 FY26, Q4 FY25
Personal loan book expected to return to growth in coming quarters as organic disbursements pick up, while credit card spend growth to follow.
Mentioned in Q1 FY26, Q2 FY25
Microfinance credit costs have peaked in Q1 and are expected to show a declining trend in coming quarters as fresh disbursements resume cautiously.
Mentioned in Q3 FY25, Q4 FY25
Management noted uncertainty whether microfinance industry changes are cyclical or structural, which could require business model changes.
Mentioned in Q2 FY26, Q3 FY26
Management expects NIM to increase moderately in Q4 due to full-quarter benefit of CRR cuts and seasonal aberrations, assuming no further rate cuts.
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Guidance and risk preview
Management expects NIM to reduce gradually in FY27, with the reduction more pronounced in the second half, but at a much slower pace than the 36 bp...
The West Asia crisis and Strait of Hormuz disruptions could impact supply chains, oil prices, and inflation, potentially affecting credit quality a...
View Risks →