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Informist, Saturday, Oct. 19, 2024

 

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--Net profit INR 33.44 bln vs INR 31.91 bln year ago
--Total income INR 159 bln vs INR 135.07 bln year ago  
--Apr-Sept net profit INR 95.94 bln vs INR 66.43 bln year ago
--Apr-Sept total income INR 315.76 bln vs INR 266.91 bln year ago
--Net interest income INR 70.20 bln, up 11% on year 
--Net interest margin 4.91%  
--Gross NPA ratio 1.49% as on Sept. 30 vs 1.39% qtr ago
--Net NPA ratio 0.43% as on Sept. 30 vs 0.35% qtr ago 
--Provision coverage ratio at 71% as on Sept. 30 
--Basel III capital adequacy ratio 22.61% as on Sept. 30
--Provisions INR 6.60 bln vs INR 3.67 bln year ago 
--Advances INR 4.19 tln as on Sept. 30, up 17% YoY 
--Share of unsecured retail loans in net loans at 11.3% Sept. 30 
--Deposits at INR 4.61 tln as on Sept. 30 
--Current, savings account deposits at INR 2.01 tln as on Sept. 30
--Current, savings account ratio 43.6% as on Sept. 30 
--Fresh slippages at INR 18.75 bln 
--Upgradations, recoveries at INR 6.81 bln 
--Wrote-off loans worth INR 6.38 bln 
--Credit cost at 0.65% vs 0.55% qtr ago
--Credit-deposit ratio at 86.6% as on Sept. 30 vs 86.9% year ago
 

 

By Richard Fargose

 

MUMBAI – Kotak Mahindra Bank's net profit for the quarter ended September missed analysts view, and rose only 4.8% on year to INR 33.44 billion, due to a further contraction in net interest margin and rise in provisions. According to an average of estimates from 12 brokerage firms, the private sector bank was expected to report net profit of INR 34.80 billion.

 

On a sequential basis, the private sector bank's net profit tumbled over 46.5%, mainly due to the statistical effect of an exceptionally high base. In Apr-Jun, the bank’s net profit soared to INR 62.50 billion due to a net gain of 35.2 bln rupees from divestment of 70% stake in its general insurance arm to Zurich Insurance Co.

 

The bank's net interest income for Jul-Sept rose to INR 70.20 billion, from INR 62.97 billion, up 11% from a year ago. Net interest margin of the bank moderated to 4.91% for the quarter under review from 5.02% in the previous quarter.

 

With credit growth outpacing deposit growth, most banks have raised their deposit rates amid rising competition and are increasingly relying on bulk term deposits and certificates of deposits to fund asset growth, which has impacted their net interest margin. 

 

The bank's total income rose to INR 159 billion in Jul-Sept from INR 135.07 billion a year ago. Advances increased 17% on year to INR 4.19 trillion as of Sept. 30, from INR 3.57 trillion a year ago. While, total deposits grew to INR 4.61 trillion as on Sept. 30, up 15.1% on year.

 

The bank reported slower loan growth compared to previous quarter. As of Jun. 30, the bank's net advances were up 19%, while deposits had risen at almost similar pace of 16%. As a result, the Credit-deposit ratio of the bank declined slightly to 86.6% as of Sept. 30 from 87.2% a quarter ago and 86.9% year ago.

 

Of the total deposits, low cost—current account and savings account deposits rose only 4.0% on year to INR 2.01 trillion as on Sept. 30. The CASA ratio as at Sept. 30 stood at 43.6% as against 43.4% a quarter ago, but lower than 48.3% a year ago.

 

Unsecured retail advances which includes retail micro-credit were 11.3% of net advances as at Sept 30, which is lower than 11.6% as of Jun. 30. The bank's customer base has increased to 52 million as on Sept. 30 from 46 million a year ago.

 

Sharp rise in provision also weighed on the bottom line of the bank. Asset quality of the bank deteriorated slightly during the quarter, with the gross non-performing asset ratio rising to 1.49% as on Sept. 30 from 1.39% a quarter ago. Net NPA ratio increased to 0.43% from 0.35% a quarter ago.

 

Provisions and contingencies, increased by 80.2% on year to INR 6.60 billion for the quarter. The annualised credit cost for the quarter was 0.65%, higher than 0.42% a year ago and 0.55% a quarter ago. Provision coverage ratio was 71% as on Sept. 30.

 

Fresh slippages increased sharply to INR 18.75 billion in Jul-Sept from INR 13.58 billion a quarter ago and INR 13.14 billion a year ago. Upgradations, recoveries during the quarter were INR 6.81 billion and Wrote-off of loans were INR 6.38 billion.

 

The outstanding gross non-performing assets rose 10.2% on quarter to INR 60.33 billion as on Sept. 30.

 

The capital adequacy ratio, as per Basel III, was 22.6% as of Sept. 30 and the common equity tier-I ratio was 21.5%.

 

For the first half of financial year 2024-25 (Apr-Mar), Kotak Mahindra Bank’s net profit was up 44.4% on year at INR 95.94 billion. Total income for Apr-Sept was INR 315.76 billion, up 18.3% from a year ago.

 

On Friday, Kotak Mahindra Bank shares ended at INR 1,871.05 on the NSE, up 0.4% from Thursday.  End

 

Edited by Akul Nishant Akhoury

 

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