Managing Director and CEO Ashok Vaswani noted that while the bank had seen rising delinquencies in its MFI segment since the third quarter of FY25, the worst appears to be over. “We believe credit costs have peaked in MFI business; retail CV stress is partly due to the macroeconomic environment,” he said, adding that fresh MFI disbursements are expected to pick up as run-offs normalise.
The lender also said retail commercial vehicle (CV) loans saw higher credit costs, which it attributed to broader economic headwinds. Executive Director Shanti Ekambaram stated the bank has tightened disbursements in the CV segment and is monitoring the situation.
Kotak said its personal loan business continues to grow, and it remains confident of reviving its credit card portfolio, which was impacted last year due to an RBI embargo on issuances. Vaswani said the bank has restarted card issuance in Q1 and expects the business to return to growth.
On the liability side, Kotak highlighted deposit growth of 15% YoY, with its CASA ratio at 40.9% and a focus on expanding its low-cost deposit base through the 811 platform. CFO Devang Gheewala said net interest margin (NIM) compression was largely due to repo rate cuts and deposit repricing lags but expects the benefit of lower CRR to flow in from September.
Q1 Results
The private-sector lender posted a net profit of ₹3,281.7 crore for the June quarter, down 57.5% from ₹6,250 crore a year earlier and missing Street estimates of ₹3,442 crore. Provisions surged to ₹1,207.76 crore, compared with ₹909.38 crore in the previous quarter and ₹578.48 crore a year ago.
Gross non-performing assets (NPA) rose to ₹6,637.7 crore, or 1.48% of total loans, from 1.42% in the prior quarter, while net NPAs increased to ₹1,531 crore, or 0.34%, versus 0.31% sequentially.
Also Read: Kotak Mahindra Bank reports Q1 net profit of ₹3,282 crore, net interest income increases 6%
First Published:Â Jul 26, 2025 5:33 PM IST
