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Systematix Research Report
Kotak Mahindra Bank Ltd.’s Q1 FY22 performance was relatively steady compared to the banking industry, with margin expansion and a slight increase in the delinquency rate to 297 basis points (annualised) compared to 248 bps in FY21.
Core fee income picked up but was below the pre-pandemic run-rate (in terms of fee income-average assets ratio).
The rise in establishment cost was mainly due to higher variable costs and an unfavourable base due to salary cuts taken by the top and senior management.
With elevated credit costs at 133 bps versus 92 bps in FY21, Kotak Mahindra Bank maintained provision coverage at 65% - similar to the pre-pandemic level.
It did not utilise Covid-19 related contingent provisions (of Rs 12.8 billion, 106 bps of loans).
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