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Informist, Saturday, Oct. 25, 2025

 

--Kotak Bank: See gradual improvement in margins in Q3, Q4 
--CONTEXT: Comments by Kotak Mahindra Bk's mgmt at post-earnings press meet 
--Kotak Bank: Expect credit cost to gradually moderate in Oct-Mar

 

MUMBAI/NEW DELHI – Kotak Mahindra Bank's management expects to report a better financial performance going ahead due to lower credit cost and better margins, it said in a post-earnings media call Saturday. "We are seeing gradual decline in the credit cost and as we go forward for next two quarters, we will see further reduction in the credit cost. So, with gradual reduction in credit cost and gradual increase in the net interest margin, one would see the uptake in the bank's performance going forward," the management said.

 

The bank's net profit for the September quarter fell marginally on year to INR 32.53 billion, mainly because of a jump in provisions. The bank's provisions rose 44% on year to INR 9.47 billion in the September quarter, but fell 22% on quarter.

 

The bank's credit cost fell to 0.79% in the September quarter from 0.93% the previous quarter, but was higher than 0.65% a year ago. However, the lender's net interest margin contracted in Jul-Sept, primarily due to the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 100 bps so far in 2025. The bank's net interest margin was 4.54% in the September quarter, down from 4.65% a quarter ago and 4.91% a year ago.

 

The private sector bank expects gradual increase in margins as the repo rate cut effect has been considered in Jul-Sept. "As the deposit starts repricing over next two quarters, we will see gradual improvement in the margin in Q3 as well as Q4," the mangement said.

 

Asked about the bank's plan to acquire majority stake in IDBI Bank, the management said, "We look at every single opportunity that kind of comes along. We cannot and should not be commenting upon any items which could or could not be in process. So maybe, a little premature to talk about what is happening on any, not only on IDBI Bank, on any of the deals that we could be looking at at this point in time."

 

In 2022, the government had invited expression of interest to sell its 30.48% stake and Life Insurance Corp. of India's 30.24% stake in IDBI Bank. The government had received multiple expression of interest from potential investors in March 2023. According to media reports, Kotak Mahindra Bank had shown interest in the proposed sale.

 

The management also said that the bank aspires to grow across the spectrum of financial space and is open to inorganic growth. "On inorganic, we have the capital and our aspiration is to grow and it is not only the bank, it is also the subsidiary companies, whether it is asset management, life insurance, securities – these are all areas we love these businesses and wish to grow," the management said. "It is all about getting lots more customers, getting lots more scale and if those things are satisfied strategically then of course it has to make sense financially and if it makes sense strategically and financially we would love to do these kind of transactions."

 

On Friday, shares of Kotak Mahindra Bank ended 1.7% lower at INR 2187 on the National Stock Exchange.  End

 

Reported by Akash Mandal and Sagar Sen

Edited by Avishek Dutta

 

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