š Banks in Trouble! Kotak & IDFC First Bank Q1 Profit CrashesāDetails Inside š¬
- MediaFx
- Jul 26
- 2 min read
TL;DR:Ā Kotak Mahindra Bankās Q1 FYāÆ26 standalone profit fell ~7% YoY to ā¹3,282āÆcrore, hit by huge provisions despite core income rising 6% š. IDFC First Bank saw a steeper 32% YoY profit drop to ā¹463āÆcrore, even though Net Interest Income rose ~5% and deposits surged šØ. Both banks face margin pressure and rising NPAs, sparking concern among retail depositors and working people investing in these lenders.
š¦ Kotak Mahindra Bank: Profit Falls but Core Shows Strength
Standalone Profit After Tax (PAT) fell 7% YoY to ā¹3,282āÆcrore, down from ā¹3,520āÆcrore last year. Despite adjusted numbers without past yearās insurance stake gain, the decline remains sharp š.
Provisions doubled YoY to ā¹1,207āÆcrore (+109%), burdening profits šø.
Net Interest Income (NII) rose 6% YoY to ā¹7,259āÆcrore, but Net Interest Margin (NIM) slipped to 4.65%Ā from 5.02% last year š¦. Asset quality wobbled too: GNPA rose to 1.48%Ā from 1.39% š§Ø.
Loan book grew ~13%, driven by retail lending up ~16% YoY š. Consolidated group saw modest growth with overall group net profit slightly upāthanks to performance of subsidiaries like AMC, Securities, Life along with strong capital ratios (CAR ~23%) š§¾.
š³ IDFC First Bank: Profit Crumbles Under Microfinance Freakout
Q1 PAT dropped 32% YoYĀ to ā¹463āÆcrore, from prior ā¹681āÆcrore š„. But sequentially PAT grew ~52%, suggesting some quarterly bounce-back š.
NII rose ~5.1% YoY to ā¹4,933āÆcrore, fee income up ~8.5%, operating income +13.4% YoYābut heavy credit cost dented profit š«.
Provisions surged 67% to ā¹1,659āÆcroreĀ due to microfinance slippages š£. GNPA rose to 1.97%, net NPA to 0.55%; margin contracted by 24 bps QoQ to 5.71% NIMĀ due to repo transmission and asset mix changes š.
Deposits grew ~25% YoY; CASA ratio improved to ~48% š°. CEO V Vaidyanathan expects margin recovery by H2 FY26 and sees a strong capital adequacy (~17.6%) and stable asset quality outside MFI segment š®.
š·āāļø What It Means for You ā From the Peopleās POV
Retail investors & savers beware: Though deposit growth seems healthy, lower margins and rising bad loans mean banks may pass on cost to depositors or cut interest rates š§¾.
Credit costs are rising: Especially in microfinance, vulnerable workingāclass borrowers may face tighter credit access as banks retrench š·.
Stronger backup behind these banks: Kotakās capital ratios (~23%) and IDFC Firstās deposit franchise (~48% CASA) provide buffersābut core banking profits under pressure show the limits š§®.
š Summary Table
Bank | Q1 FYāÆ26 PAT | YoY % Ī | NII Growth | NIM | Notes |
Kotak Mahindra | ā¹3,282āÆcrore | ā7% | +6% | 4.65% | Higher provisions, asset stress |
IDFC First Bank | ā¹463āÆcrore | ā32% | +5% | 5.71% | Microfinance slippages, margin pressure |
š© Final MediaFx Views
From the peopleās perspective, big private banks like Kotak & IDFC First need to prioritize affordable credit, fair interest for depositors, and transparent risk handlingĀ š¤. We must demand that banks donāt sacrifice the working class to maintain profitsāthis means resisting aggressive credit cost transfer onto poor borrowers or small depositors š«. Itās time banks truly serve common people, not just shareholder wealth šŖ.
