Kotak Mahindra Bank Q1 Results: Net Profit Rises 32% On Higher Other Income
Kotak Mahindra Bank Ltd.’s quarterly profit rose as other income surged.
Net profit of the private lender increased 32% year-on-year to Rs 1,642 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 1,652-crore consensus estimate of analysts tracked by Bloomberg. Bottom line, however, was down 2.4% sequentially.
Its net interest income, or core income, rose 6% over the year earlier to Rs 3,942 crore during the period, against an estimated Rs 3,961 crore.
Other income doubled to Rs 1,583 crore. It included fee income worth Rs 1,169 crore, which rose 51% year-on-year.
The lender’s asset quality worsened, with gross non-performing asset ratio at 3.56% compared with 3.25% as of March. Net NPA ratio marginally rose to 1.28% from 1.21% in the March quarter.
As on June 30, loans that are overdue for more than 60 days but are not NPA rose to Rs 430 crore from Rs 110 crore at the end of March, indicating higher stressed assets. Restructuring owing to the Covid-19 pandemic rose to Rs 552 crore in the first quarter from Rs 435 crore as of March.
"Most of the slippages this quarter came from customers we were not able to reach due to the second wave. These customers are expected to come back soon," Dipak Gupta, joint managing director of Kotak Mahindra Bank, said. "The situation this time around around is looking better than last year."
Total provisions fell 2.8% year-on-year to Rs 935 crore. Provisions set aside for the Covid-19 pandemic stood at Rs 1,279 crore, same as the preceding quarter. The bank did not utilise any of these floating provisions during the first quarter.
Total advances rose 7% year-on-year to Rs 2.17 lakh crore. Sequentially, however, outstanding advances fell 2.7%.
Credit card loans fell 11.4% over a year ago to Rs 3,848 crore.
Corporate banking loans fell 3% year-on-year to Rs 59,731 crore.
As on June 30, the bank disbursed Rs 11,900 crore under the government’s emergency credit linked scheme.
Total deposits rose 9.2% year-on-year to Rs 2.85 lakh crore.
Current account deposits rose to Rs 52,433 crore, up 36% from a year earlier.
Savings account deposits rose 10% year-on-year to Rs 1.2 lakh crore.
"We have revved up our lending engine since November last year and are waiting. We will review the situation and decide how and when we want to push the accelerator," Gupta said. "We're still circumspect about a potential third wave impact and do not want to be caught unaware."
Shares of Kotak Mahindra Bank gained 1.5% after the results were announced compared with a flat Nifty 50.