📉 Banks in Trouble! Kotak & IDFC First Bank Q1 Profit Crashes—Details Inside 😬
- MediaFx
- Jul 26, 2025
- 2 min read
TL;DR: Kotak Mahindra Bank’s Q1 FY 26 standalone profit fell ~7% YoY to ₹3,282 crore, hit by huge provisions despite core income rising 6% 📉. IDFC First Bank saw a steeper 32% YoY profit drop to ₹463 crore, even though Net Interest Income rose ~5% and deposits surged 🚨. Both banks face margin pressure and rising NPAs, sparking concern among retail depositors and working people investing in these lenders.
🏦 Kotak Mahindra Bank: Profit Falls but Core Shows Strength
Standalone Profit After Tax (PAT) fell 7% YoY to ₹3,282 crore, down from ₹3,520 crore last year. Despite adjusted numbers without past year’s insurance stake gain, the decline remains sharp 📉.
Provisions doubled YoY to ₹1,207 crore (+109%), burdening profits 💸.
Net Interest Income (NII) rose 6% YoY to ₹7,259 crore, but Net Interest Margin (NIM) slipped to 4.65% from 5.02% last year 🏦. Asset quality wobbled too: GNPA rose to 1.48% from 1.39% 🧨.
Loan book grew ~13%, driven by retail lending up ~16% YoY 📊. Consolidated group saw modest growth with overall group net profit slightly up—thanks to performance of subsidiaries like AMC, Securities, Life along with strong capital ratios (CAR ~23%) 🧾.
💳 IDFC First Bank: Profit Crumbles Under Microfinance Freakout
Q1 PAT dropped 32% YoY to ₹463 crore, from prior ₹681 crore 💥. But sequentially PAT grew ~52%, suggesting some quarterly bounce-back 🔁.
NII rose ~5.1% YoY to ₹4,933 crore, fee income up ~8.5%, operating income +13.4% YoY—but heavy credit cost dented profit 🚫.
Provisions surged 67% to ₹1,659 crore due to microfinance slippages 💣. GNPA rose to 1.97%, net NPA to 0.55%; margin contracted by 24 bps QoQ to 5.71% NIM due to repo transmission and asset mix changes 📉.
Deposits grew ~25% YoY; CASA ratio improved to ~48% 💰. CEO V Vaidyanathan expects margin recovery by H2 FY26 and sees a strong capital adequacy (~17.6%) and stable asset quality outside MFI segment 🔮.
👷♀️ What It Means for You – From the People’s 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 🧾.
Credit costs are rising: Especially in microfinance, vulnerable working‑class borrowers may face tighter credit access as banks retrench 🚷.
Stronger backup behind these banks: Kotak’s capital ratios (~23%) and IDFC First’s deposit franchise (~48% CASA) provide buffers—but core banking profits under pressure show the limits 🧮.
📊 Summary Table
Bank | Q1 FY 26 PAT | YoY % Δ | NII Growth | NIM | Notes |
Kotak Mahindra | ₹3,282 crore | –7% | +6% | 4.65% | Higher provisions, asset stress |
IDFC First Bank | ₹463 crore | –32% | +5% | 5.71% | Microfinance slippages, margin pressure |
🚩 Final MediaFx Views
From the people’s perspective, big private banks like Kotak & IDFC First need to prioritize affordable credit, fair interest for depositors, and transparent risk handling 🤝. We must demand that banks don’t sacrifice the working class to maintain profits—this means resisting aggressive credit cost transfer onto poor borrowers or small depositors 🚫. It’s time banks truly serve common people, not just shareholder wealth 💪.
