Kotak Mahindra Bank Limited posted strong operational momentum for the second quarter of the fiscal year ending September 30, 2026, reporting a 24.7% year-on-year increase in net advances to ₹5,77,094 crore (approximately ₹5.77 lakh crore). In a provisional regulatory disclosure submitted to stock exchanges on October 5, 2026, the private sector lender revealed that its loan book grew from ₹4,62,789 crore twelve months prior, while registering a sequential quarterly increase of 12.7% over the ₹5,12,249 crore recorded as of June 30, 2026.
Deposit gathering kept pace with credit deployment. Total customer deposits rose 23.2% year-on-year to ₹6,51,491 crore, up 13.7% sequentially from the first-quarter baseline. Low-cost Current Account Savings Account (CASA) balances increased 11.3% year-on-year to ₹2,49,105 crore, reflecting customer retention even as industry-wide competition for term liquidity continued to prompt depositors to shift savings into higher-yielding term deposits.
Key Takeaways
- Double-Digit Credit Expansion: Net advances expanded 24.7% year-on-year to ₹5,77,094 crore, supported by sequential growth of 12.7% from the June quarter.
- Strong Deposit Mobilization: Total deposits climbed 23.2% year-on-year to ₹6,51,491 crore, outpacing the broader Indian commercial banking system average (11% to 13%).
- CASA Balances Climb to ₹2.49 Lakh Crore: Low-cost CASA deposits expanded 11.3% year-on-year to reach ₹2,49,105 crore, though outpaced by term deposit accumulation.
- Sequential Acceleration: Both advances (+12.7% QoQ) and total deposits (+13.7% QoQ) demonstrated strong post-monsoon commercial traction heading into the high-consumption festive shopping period.
- Healthy Credit-to-Deposit Balance: The bank maintained a prudent Credit-to-Deposit (CD) ratio near 88.6%, balancing credit underwriting against stable liability inflows.
KOTAK MAHINDRA BANK Q2 PROVISIONAL BALANCE SHEET SNAPSHOT (YoY VARIATION)
NET ADVANCES (Loans)
[+24.7% YoY] ₹5,77,094 Cr vs ₹4,62,789 Cr ▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲ (Surges Past ₹5.75L Cr)
TOTAL DEPOSITS
[+23.2% YoY] ₹6,51,491 Cr vs ₹5,28,800 Cr ▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲▲
CASA DEPOSITS
[+11.3% YoY] ₹2,49,105 Cr vs ₹2,23,800 Cr ▲▲▲▲▲▲▲▲▲
SEQUENTIAL ADVANCES GROWTH (QoQ)
[+12.7% QoQ] ₹5,77,094 Cr vs ₹5,12,249 Cr ▲▲▲▲▲▲▲▲▲▲
Source: Kotak Mahindra Bank BSE/NSE Regulatory Filings (Quarter Ended September 30, 2026)
Credit Growth Drivers: Retail, SME, and Corporate Wholesale Rebalancing
The 24.7% annual growth in Kotak Mahindra Bank’s loan book highlights the execution of its strategy under Managing Director and CEO Ashok Vaswani. The lender has maintained a dual focus: expanding secured consumer and SME portfolios while rebuilding wholesale corporate banking relationships.
THE CORE LENDING ENGINES
┌────────────────────────────┐
│ SECURED CONSUMER & MSME │ ──► Home loans, loan against property (LAP),
│ (~65–70% of Portfolio) │ commercial vehicle financing, and SME credit.
└────────────────────────────┘
▲
│ BALANCED ASSET PORTFOLIO (₹5,77,094 Cr)
▼
┌────────────────────────────┐
│ WHOLESALE & LARGE CORP │ ──► High-grade corporate debt syndication,
│ (~30–35% of Portfolio) │ capex project finance, and working capital.
└────────────────────────────┘
- Secured Retail & Mortgage Leadership: Mortgages, commercial vehicle credit, and construction equipment loans provided steady volume growth, supported by national infrastructure spending and ongoing residential property absorption across Tier-1 and Tier-2 markets.
- Selective Unsecured Underwriting: Following Reserve Bank of India (RBI) risk-weight adjustments on unsecured consumer credit, Kotak maintained tight underwriting filters on personal loans and credit cards, keeping higher-risk unsecured debt within a measured band of total advances.
- Mid-Market & Corporate Capex: Corporate banking teams captured market share in renewable energy financing, infrastructure EPC funding, and short-term working capital facilities ahead of the festive quarter.
Deposit Inflows and the CASA Ratio Dynamics
Kotak Mahindra Bank’s deposit performance—expanding 23.2% YoY to ₹6.51 lakh crore—outperformed peer private banks, many of which have reported deposit growth trailing loan creation.
| Operational Balance Metric | Q2 FY26 (Prior Year) | Q1 FY27 (June 2026) | Q2 FY27 (September 2026) | YoY Change (%) | QoQ Change (%) |
| Net Advances | ~₹4,62,789 Cr | ₹5,12,249 Cr | ₹5,77,094 Cr | +24.7% | +12.7% |
| Total Deposits | ~₹5,28,800 Cr | ~₹5,73,000 Cr | ₹6,51,491 Cr | +23.2% | +13.7% |
| CASA Deposits | ~₹2,23,800 Cr | ~₹2,38,000 Cr | ₹2,49,105 Cr | +11.3% | +4.7% |
| Implied CASA Ratio | ~42.3% | ~41.5% | ~38.2% | -410 bps | -330 bps |
| Credit-to-Deposit (CD) Ratio | ~87.5% | ~89.4% | ~88.6% | +110 bps | -80 bps |
Navigating the Term Deposit Shift
While CASA balances grew by an absolute 11.3% to ₹2,49,105 crore, the bank’s implied CASA ratio adjusted to approximately 38.2%, down from over 42% a year earlier. This realignment mirrors systemic banking sector trends:
- Attractiveness of Fixed Deposits: With terminal deposit rates yielding 7.10% to 7.60% for special tenors, retail and corporate treasuries actively locked liquid cash into fixed term deposits, outpacing savings account accumulation.
- Institutional & Bulk Inflows: To fund double-digit sequential credit growth (+12.7% QoQ), Kotak gathered term liabilities and wholesale institutional certificates of deposit (CDs), ensuring loan disbursements were matched by stable liabilities.
- Deposit Rate Calibration: Kotak’s earlier strategic repricing of selective savings tiers (offering differentiated rates for balances above specific thresholds) helped protect retail balances from moving into competing debt mutual funds.
Industry Benchmarks: How Kotak Compares
Kotak Mahindra Bank’s provisional update confirms that credit demand in the Indian economy remained broad-based during the July–September period, with private sector lenders maintaining an edge over public sector rivals:
┌────────────────────────────────────────────────────────────────────────┐
│ Q2 PRIVATE SECTOR CREDIT COMPARISON │
├──────────────────┬──────────────────┬──────────────────────────────────┤
│ LENDER │ ADVANCES GROWTH │ DEPOSIT GROWTH │
├──────────────────┼──────────────────┼──────────────────────────────────┤
│ Kotak Bank │ +24.7% YoY │ +23.2% YoY │
│ │ (₹5.77 Lakh Cr) │ (₹6.51 Lakh Cr) │
├──────────────────┼──────────────────┼──────────────────────────────────┤
│ YES Bank │ +23.8% YoY │ +19.5% YoY │
│ │ (₹3.10 Lakh Cr) │ (₹3.54 Lakh Cr) │
├──────────────────┼──────────────────┼──────────────────────────────────┤
│ HDFC Bank │ +16.3% YoY │ +18.8% YoY │
│ │ (Rebalancing LDR)│ (Outpacing credit) │
├──────────────────┼──────────────────┼──────────────────────────────────┤
│ PSU Bank Average │ ~+18.2% YoY │ ~+13.2% YoY │
│ (14 Institutions)│ (System-wide) │ (Lagging credit pace) │
└──────────────────┴──────────────────┴──────────────────────────────────┘
While mega-lender HDFC Bank intentionally prioritized deposit growth over aggressive balance-sheet expansion to normalize its post-merger CD ratio, Kotak Mahindra Bank and mid-tier private peers like YES Bank actively deployed capital, growing their loan books at roughly twice the rate of nominal GDP.
What Remains Uncertain Ahead of Audited Results
While provisional figures demonstrate solid volume growth, several profitability and asset-quality factors will be reviewed when the Board approves audited second-quarter financial statements:
- Net Interest Margin (NIM) Compression: Given that term deposit accumulation (+23.2%) outpaced low-cost CASA growth (+11.3%), analysts will examine whether higher cost-of-funds trimmed the bank’s net interest margin from the 4.54% reported in earlier quarters.
- Asset Quality and Credit Costs: With micro-credit and unsecured portfolios facing stress across the banking system, slippages in retail cards and small-ticket SME segments will be monitored to assess if credit provisioning costs increased.
- Non-Lending Subsidiary Performance: As a financial conglomerate, Kotak’s consolidated earnings are influenced by contributions from Kotak Life Insurance, Kotak Securities, and Kotak AMC. Investors will assess whether domestic capital market volatility affected wealth management fees.
What Happens Next
Kotak Mahindra Bank’s Board of Directors will convene later in October 2026 to review and approve the comprehensive, audited financial statements for Q2 FY27.
Key milestones to monitor include:
- Audited Financial Disclosures: Release of headline Net Interest Income (NII), Net Profit (PAT), and Gross/Net NPA ratios.
- Management Guidance: Post-earnings commentary from CEO Ashok Vaswani regarding full-year credit cost expectations, branch network expansion plans, and ongoing digital IT investments following regulatory compliance updates.
- Festive Demand Trajectory: Early loan disbursement trends across vehicle finance, gold loans, and consumer durable financing during the October–November festive shopping season.
Frequently Asked Questions
What were Kotak Mahindra Bank’s net advances for Q2?
Kotak Mahindra Bank reported a 24.7% year-on-year increase in net advances, reaching ₹5,77,094 crore (approx. ₹5.77 lakh crore) for the quarter ended September 30, 2026, compared to ₹4,62,789 crore in the prior year.
How much did Kotak Mahindra Bank’s deposits grow?
Total deposits rose 23.2% year-on-year to ₹6,51,491 crore, up 13.7% sequentially from the June quarter.
What was the performance of Kotak’s CASA deposits?
Low-cost CASA deposits grew 11.3% year-on-year to ₹2,49,105 crore. However, because fixed-term deposits expanded at a faster pace, the bank’s overall CASA ratio adjusted to approximately 38.2%.
How did Kotak’s sequential growth perform from Q1 to Q2?
Sequentially, net advances grew 12.7% (from ₹5,12,249 crore as of June 30, 2026, to ₹5,77,094 crore), while total deposits expanded 13.7%, indicating strong momentum heading into the festive period.
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