Kotak Mahindra Bank posted a 14% loan book growth, but this was largely led by the corporate segment — a trend that did not sit well with the market. Axis Bank’s growth, while seemingly better than HDFC Bank’s, continued to stay in single digits for the third straight quarter, raising concerns over its momentum.
On net interest margins (NIMs), ICICI Bank again came out on top, with only a 7 basis point decline. HDFC Bank’s overall NIMs fell by around 19 basis points, but the core margin drop was a more modest 11–12 basis points. Axis Bank saw a 17 basis point fall, including a 4 basis point technical impact. Kotak Mahindra Bank saw the steepest decline — 32 basis points, which was a surprise to analysts and brokerages.Asset quality remained stable for ICICI and HDFC Bank. However, Axis Bank saw an 88 basis point spike in credit costs, largely due to the same technical issue that affected its margins. This was viewed negatively by the Street. Kotak Mahindra Bank also struggled, with credit costs rising nearly 30 basis points, especially in the microfinance and commercial vehicle segments. While the bank said these pressures may ease in the second half, the trend was unexpected.
In terms of return ratios, ICICI Bank not only held its ground but also improved its return on assets (RoA) sequentially. HDFC Bank maintained its RoAs as well. Axis Bank, however, saw its profit dip by ₹600 crore, with a 15 basis point RoA impact. Kotak Mahindra Bank fared worse — RoAs dropped 24 basis points. This was due to three factors: declining net interest margins, rising credit costs, and a shift in loan mix leading to lower net interest income.
Summing up the quarter’s performance, ICICI Bank led across most metrics, while Axis Bank and Kotak Mahindra Bank fell short of expectations.
