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Prabhudas Lilladher Report
Kotak Mahindra Bank Ltd.’s Q4 earnings of Rs 26.9 billion (our estimate: Rs 17.3 billion) were higher led by healthy loan growth of 21% YoY, solid fee income accretion, and provision write back.
Margins were a tad better (up 16 basis points QoQ) led by higher current account and savings account share.
Driven by better collections overall asset quality improved QoQ. Covid-19 provisions are ~20 bps and restructuring at 44 bps is lower to peers.
On rate hike and inflation, Kotak Mahindra Bank suggested that while the situation is evolving, as of now it seems credit growth may not be materially impacted although a higher secured pool can offer a good inflation hedge.
Also, in-line with our stance, it indicated that in short term there could be a positive impact on net interest margin for banks having a higher share of short term assets.
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