India's Kotak Bank profit rise 4.2%, misses analyst estimate

Kotak Mahindra Bank

24/01/2026 09:56

By Gopika Gopakumar

MUMBAI, Jan 23 (Reuters) - India's Kotak Mahindra Bank KTKM.NS reported an increase in third-quarter profit on Saturday, supported by strong loan growth and lower provisions set aside for potential bad loans on a sequential basis.

The country's third-largest private lender by market capitalisation said standalone net profit rose 4.2% to 34.46 billion rupees ($376 million) for the three months ended December.

Analysts had expected a profit of 35.72 billion rupees, according to data compiled by LSEG.

Indian lenders reported double-digit loan growth in the October–to-December period following several quarters of slower growth, supported by spending linked to the local festive season and sweeping consumption tax cuts.

Kotak Mahindra Bank's net interest income, the difference between interest earned on loans and paid on deposits, rose 5% to 75 billion rupees.

Its provisions and contingencies fell 15% quarter-on-quarter to 8.1 billion rupees. However, they were still up 2% from a year earlier.

The lender's gross non-performing asset ratio fell to 1.3% at the end of December, from 1.39% three months earlier and 1.5% in the year-ago quarter.

Net interest margins remained flat at 4.54%.

The Reserve Bank of India has reduced its benchmark interest rate by a cumulative 125 basis points since February 2025 to spur consumption and investment, with the latest cut coming in December 2025.

Lenders typically pass on the benefit to borrowers quickly by cutting lending rates, while deposit rates adjust with a lag — squeezing their net interest margins in the interim.

($1 = 91.6550 Indian rupees)

 (Reporting by Gopika Gopakumar; Editing by Joe Bavier)

 ((Gopika.Gopakumar@thomsonreuters.com;))