Kotak Mahindra Bank Ltd. has recorded a 10% year-on-year growth in its net profit for the third quarter of FY 2025, reaching ₹3,305 crore. This figure surpasses market expectations of ₹3,287.5 crore, reinforcing the bank’s performance in a challenging financial landscape.
Strong Growth in Net Interest Income
Net Interest Income (NII), a critical indicator of a bank’s core earnings, also climbed by 10% year-on-year to ₹7,196 crore. The figure marginally exceeded the street estimate of ₹7,147.7 crore, signaling the bank’s sustained ability to generate revenue from its lending activities.
Net Interest Margin (NIM) was recorded at 4.93% for the quarter. While stable, it underscores Kotak Mahindra Bank’s focus on balancing profitability and lending costs amidst evolving market dynamics.
Asset Quality Shows Mixed Signals
While the bank posted strong financial growth, its asset quality faced slight stress. The Gross Non-Performing Assets (GNPA) ratio inched up to 1.50% from 1.49% in the previous quarter, reflecting a marginal rise in bad loans. Meanwhile, the Net NPA ratio stood at 0.41%, indicating robust provisioning practices to mitigate risks.
This shift in asset quality, although minor, remains a crucial metric for stakeholders monitoring the bank’s risk profile.
CASA Deposits Witness Significant Growth
One of the standout aspects of the quarterly results was the impressive growth in Current Account and Savings Account (CASA) deposits. CASA deposits grew by 15% year-on-year to ₹4.58 lakh crore. The CASA ratio for the quarter stood at 42.3%, highlighting a stable deposit base and lower-cost funding source for the bank.
Operational Performance and Year-to-Date Metrics
The bank’s operating profit for Q3FY25 rose to ₹5,181 crore, up from ₹4,566 crore in the same period last year. This reflects enhanced operational efficiency and cost management.
For the year-to-date period, Kotak Mahindra Bank reported a 10% growth in profit, reaching ₹15,534 crore compared to ₹14,126 crore in the previous year. This steady year-on-year increase highlights the lender’s ability to maintain consistent performance.
Credit-Deposit Ratio Holds Steady
The credit-deposit ratio—a key measure of a bank’s lending capacity—stood at 87.40% for the December quarter. This indicates a healthy balance between deposits and lending activity, positioning the bank to capitalize on future growth opportunities.
| Metric | Q3 FY25 | Q3 FY24 | Growth (%) |
|---|---|---|---|
| Net Profit | ₹3,305 crore | ₹3,005 crore | 10% |
| Net Interest Income | ₹7,196 crore | Not specified | 10% |
| Operating Profit | ₹5,181 crore | ₹4,566 crore | 13% |
| CASA Deposits | ₹4.58 lakh crore | Not specified | 15% |
| Credit-Deposit Ratio | 87.40% | Not specified | — |
Market Reaction and Outlook
Kotak Mahindra Bank’s performance in Q3 FY25 reflects a stable and resilient operational model, even as asset quality presents minor challenges. With consistent growth in CASA deposits and robust NIM, the bank is well-positioned to navigate evolving financial conditions.
Investors and analysts will keep a close eye on the bank’s future provisioning strategies and its ability to manage asset quality, as these remain critical to sustaining its growth trajectory.
