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Kotak Mahindra Bank Q2 Review - Well Positioned For Earnings Pick-Up: Axis Securities

Kotak Mahindra Bank Q2 Review - Well Positioned For Earnings Pick-Up: Axis Securities

Customers wearing protective masks approach a Kotak Mahindra Bank Ltd. branch on a near-empty street in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
Customers wearing protective masks approach a Kotak Mahindra Bank Ltd. branch on a near-empty street in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Axis Securities Report

The key positives for Kotak Mahindra Bank Ltd. in Q2 FY22 was strong pick up in loan growth (up 14.7% YoY/ 8%) coupled with stable asset quality resulting in earnings growth of 23.8% QoQ to Rs 203.2 billion.

Loan growth was spread across segments led by mortgages and unsecured book (up more than 10%).

Net interest margin slowed down to ~4.45% from 4.6% QoQ.

Gross /Net non-performing assets came down ~40/20 basis points to 3.2%/1.1% with gross slippage ratio of ~1.9%.

Credit costs declined to ~60 bps of loans. Restructured book is also moderate at ~54 bps.

With the push on growth, Kotak Mahindra Bank's cost-income has increased to 46.5% from 43.5% QoQ and 38.5% YoY which led to moderate pre-provision operating profit growth.

Click on the attachment to read the full report:

Axis Securities Kotak Mahindra Bank-Q2FY22-Result Update.pdf

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