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Kotak says FCNR to put further pressure on Q3 margins; repo repricing, deployment to help

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Kotak says FCNR to put further pressure on Q3 margins; repo repricing, deployment to help

Kotak says FCNR to put further pressure on Q3 margins; repo repricing, deployment to help

Kotak Mahindra Bank’s net interest margin fell to 4.31 per cent in Q2 FY27 from 4.53 per cent in the previous quarter, with FCNR(B) deposits and related advances accounting for around 15 bps of the decline. The bank expects the full-quarter FCNR impact in Q3, while deployment of the Rs 55,344 crore FCNR pool and repricing of repo-linked loans could support margins.

Kotak’s Q2 NIM fell to 4.31% from 4.53% in Q1 and 4.54% a year ago

FCNR(B) deposits and related advances contributed around 15 bps to the Q2 margin decline

Bank mobilised around Rs 55,344 crore through FCNR(B) deposits under RBI’s swap facility

Kotak expects progressive deployment of excess FCNR liquidity and repricing of floating-rate loans to support margins

Around 60% of the bank’s advances are repo-linked, with the full impact of recent repo changes expected in Q4

Fourth largest private lender Kotak Mahindra Bank expects margins to remain under pressure in the near term as the full-quarter impact of its large FCNR(B) mobilisation comes through, even as the bank progressively deploys the excess liquidity into customer assets and benefits from repricing of floating-rate loans. 54 per cent a year earlier. CFO Devang Gheewalla said FCNR(B) deposits and advances against those deposits contributed around 15 basis points to the sequential decline in NIM, while the remainder was largely due to quarter-specific factors including day-count variation and repayment of IBPC borrowings.



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