Pedestrians stand in front of a Kotak Mahindra Bank Ltd. branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Q3 Results: Kotak Mahindra Bank Beats Estimates On Strong Loan Growth

Kotak Mahindra Bank Ltd.’s quarterly profit rose at its fastest pace in six quarters, driven by strong loan growth.

Net profit rose 23 percent year-on-year to Rs 1,291 crore in the quarter ended December, according to the bank’s exchange filing. That beats the Rs 1,190 crore consensus estimate of analysts tracked by Bloomberg.

Net interest income, or core income, of the bank rose 27 percent to Rs 2,939 crore, also higher than the Rs 2,633 crore estimate. Net interest margin expanded to 4.33 percent from 4.2 percent in the previous quarter.

The bank’s profit and revenue were aided by a 23 percent rise in total advances, which stood at Rs 1,96,432 crore as on Dec. 31, the company said in a statement. It also saw a Rs 32-crore write-back, which aided the bottom line.

Asset Quality Improves

Gross non-performing assets ratio of the Uday Kotak-led bank fell to 2.07 percent from 2.15 percent in the preceding quarter. Net bad loans ratio, too, narrowed to 0.71 percent from 0.81 percent.

Other Key Highlights

  • Capital adequacy ratio as per Basel-III norms stood at 18.1 percent. Tier-I ratio stood at 17.6 percent.
  • CASA ratio—the ratio of deposits in current and saving accounts to total deposits—stood at 50.7 percent compared with 46.7 percent a year ago.
  • Savings account deposits rose 34 percent year-on-year to Rs 73,958 crore.
  • Current account deposits increased 19 percent from the last year to Rs 29,607 crore.

Shares of Kotak Mahindra Bank extended gains for the third session today. The stock rose as much as 0.9 percent after the results announcement. That compares with a 0.7 percent intra-day rally in the NSE Nifty 50 Index.

The scrip gained 18.51 percent over the last 12 months compared to a 3.46 percent rise in the NSE Nifty Bank Index during the same period. It’s also the best performer on the banking index in the last 12 months.

Q3 Results: Kotak Mahindra Bank Beats Estimates On Strong Loan Growth