Kotak Mahindra Bank Q4 Results Review - Strong Treasury Contribution Boost Earnings: Systematix

"NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Kotak Mahindra Bank Ltd. reported Q4 FY24 PAT of Rs 41.3 billion (+38% QoQ, 18% YoY) which was higher than estimates due to-marginally improved net interest margins (3 bps benefit from interest on IT refund),higher other income on reversal of mark-to-market losses and higher fee income,lower provisions due to reversal of ~80% AIF provision done in previous quarter andlower taxes from tax credits of Rs 2 billlion (5% of total tax). .Other key highlights were:Advances growth of 4.6% QoQ, 18% YoY was mainly led by 6-7% QoQ growth in Commercial banking and SME. Personal loan/business loan/consumer durables and credit cards growth was soft at 4% and was below bank’s average growth.Deposit growth (9% QoQ, 24% YoY) was led by term deposit growth of 14.5% QoQ. CASA ratio declined to 45.5% (-223 bps QoQ) as compared to peers witnessing an increase QoQ.Credit-deposit ratio reduced to 83.8% (-423 bps QoQ) and the bank expects it to be in the range of 86-87%.Reported Q4 FY24 net interest margin increased to 5.3% (+6 bps QoQ) with 3 bps benefit from interest on IT refund.Other income increased by 30% QoQ due to reversal of MTM losses on security receipts classified as NPI and seasonally higher distribution and syndication income which also benefitted from few large deals in infrastructure, real estate and NBFC financing space.Opex is likely to increase in FY25 on the back of regulatory curbs and the bank guided for Rs 3.5- 4.5 billion of impact to PBT which reflects the net impact of curb on business operations related spends coupled with higher tech spends for strengthening core banking resilience amongst others.GNPA declined to 1.4% (-34bps QoQ) mainly due to higher write-offs in retail unsecured loans which were fully provided, mainly done to align with industry practice of writing off 180 dpd loans.Basis RBI circular on 27-March 2024, the bank released AIF provision of Rs 1.57 billion (~80% of the provision made in Q3 FY24).RoA was 2.97% (2.5% ex Interest on IT refund, AIF provision reversal and tax credits)..Click on the attachment to read the full report:.Kotak Mahindra Bank Q4 Review - Upgrade To Buy Post Recent Correction On RBI’s Supervisory Action: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Kotak Mahindra Bank Q4 Results Review - Strong Treasury Contribution Boost Earnings: Systematix

Advances growth led by commercial and SME with softness in personal loan and credit cards

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Kotak Mahindra Bank Q4 Results Review - Strong Treasury Contribution Boost Earnings: Systematix

Advances growth led by commercial and SME with softness in personal loan and credit cards

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