Kotak Mahindra Bank Q3 Results: Net Profit Rises 15%, Meets Estimates

Kotak Mahindra Bank Ltd.’s quarterly profit rose on higher core income and provision write-back.

Net profit for the private lender increased 15% over the year earlier to Rs 2,131 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 2,074-crore consensus estimate of analysts tracked by Bloomberg.

Its net interest income rose 12% year-on-year to Rs 4,334 crore. Other income, too, was up 5.4% to Rs 1,361 crore.

The net interest margin was at 4.62% for the quarter ended December 2021.

Asset Quality

The bank’s asset quality improved during the period. Its gross non-performing asset ratio fell 48 basis points sequentially to 2.71%. Net NPA ratio fell 27 basis points over the preceding three months to 0.79% as on Dec. 31.

• The bank has restructured loans worth Rs 348.6 crore under the second Covid restructuring scheme permitted by the regulator.

• Overall, standard restructured accounts stand at 0.54% of advances.

• Kotak Mahindra Bank reported a write-back of provisions worth Rs 131 crore compared with provisions worth Rs 424 crore made a year ago.

• The bank continues to carry Covid provisions of Rs 1,000 crore.

"We're really enthused by the outcome on asset quality. We have seen higher recoveries and upgrades than slippages for the second straight quarter," said Jaimin Bhatt, chief financial officer, Kotak Mahindra Bank. "The provision write-back was due to the progress on the asset quality front."

Deposits & Advances

Total deposits were at Rs 3.05 lakh crore, up 15% from a year ago. The ratio of current account, savings account deposits stood at 59.9%.

Advances increased by 18% year-on-year to Rs 2.53 lakh crore as of December-end. They rose 7.6% from a quarter ago. The sharpest growth was seen in home loan portfolio, where advances rose 38% year-on-year and 12% quarter-on-quarter.

"We have really gone for growth this quarter, even though it has impacted our operating expenses a little," said Bhatt.

Shares of the lender were trading 2.38% higher after the results were announced compared with a 1.44% gain in the benchmark Nifty 50.