Signage of Kotak Mahindra Bank seen at one of its branch in Bengaluru, India. (Photographer: Anirudh Saligrama/BloombergQuint)

Kotak Mahindra Bank Posts Slowest Profit Growth In 10 Quarters

Kotak Mahindra Bank Ltd.’s profit rose at its slowest pace in 10 quarters even as India’s third-largest private lender’s asset quality improved.

Net profit rose 19.7 percent on a yearly basis to Rs 1,053 crore in the quarter ended December, the private lender said in an exchange filing. Analysts tracked by BloombergQuint had pegged the profit at Rs 1,090 crore.

Net interest income, or the core income of the bank, rose 17 percent to Rs 2,394 crore, missing the Rs 2,427 crore consensus estimate.

The Uday Kotak-led bank’s gross non-performing loans in absolute terms fell 2.6 percent to Rs 3,715 crore quarter-on-quarter.

  • Gross NPAs as a percentage of total assets fell to 2.31 percent from 2.47 percent in the September-ended quarter.
  • Net NPAs fell to 1.09 percent from 1.26 percent.
  • Provisions declined 1.7 percent to Rs 212.8 crore.

The management said during a press conference held in Mumbai that they have found no divergence in their reported NPAs during the March 2017 inspection.

Other Highlights

  • Savings deposits grew 60 percent to Rs 55,397 crore.
  • Current account deposits grew 21 percent to Rs 24,776 crore.
  • CASA ratio stood at 46.7 percent at the end of the quarter.
  • The bank's assets under management rose to Rs 1,82,879 crore from Rs 1,33,078 crore a year ago.

A well-diversified client-base and increase in the number of branches led to a 23 percent rise in the loan book to Rs 1.6 lakh crore year-on-year, according to Bloomberg Intelligence. The bank added 13 branches across the country. Total customer base rose to 12 million from 10.5 million in the last quarter.

The capital adequacy ratio stood at 18.7 percent for the quarter. Higher capital adequacy ratio should support growth for the bank, without having to raise equity, Bloomberg Intelligence said.

Shares of the Mumbai-based bank rose as much as 1.3 percent to Rs 1,059.9, the highest in three months, after the earnings announcement. That compares with 0.88 percent rise in the NSE Nifty Bank Index.

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