The Hindu Business Line : Kotak Mahindra Bank Q4 net doubles to Rs 21 cr

KOTAK Mahindra Bank has doubled its net profit for the fourth quarter ended March 2004 to Rs 20.59 crore, up from Rs 10.06 crore posted in the corresponding period of the previous year.

The bank completed its first full year as a banking entity with a net profit of Rs 78.72 crore, up 52 per cent from Rs 44.96 crore in the previous year and has proposed a 1:1 bonus and a 24 per cent dividend.

On a consolidated basis, the Kotak Mahindra group (inclusive of the banking, investment banking, stock brokerage, life insurance, mutual fund and car finance businesses) posted a 138 per cent rise in net profit for FY04 at Rs 174.44 crore (Rs 73.32 crore).

"Our conversion into a bank has helped us lower our cost of funds as well as get access to a larger base of funds. Our conversion took place at the right time when things were rather benign with little volatility in any of the markets,'' said Mr Uday Kotak, Executive Vice-Chairman & MD, Kotak Mahindra Bank, at a press conference here today.

The average cost of funds of the bank is now at five per cent, two per cent lower than when it was a non-banking finance company.

But this is partially also been due to the falling interest rate environment.

The bank has a deposit base of Rs 2,500 crore and total advances of Rs 4,608 crore, majority of which are retail advances. "We expect the retail assets to grow by 30-40 per cent in 2004-05,'' said Mr Kotak.

The bank plans to expand its branch network to 40 by FY05, up from 17 at present.

Total income of the bank for Q4 was at 116.92 crore (Rs 80.09 crore).

Net interest income more than doubled to Rs 66.8 crore (Rs 30.9 crore) while other income dipped to Rs 21.27 crore (Rs 24.82 crore).

"On a consolidated basis, 36 per cent of our total income comes from non-fund based businesses, up from 24 per cent in FY03. Interestingly, this fee-based income can grow without using up capital,'' he said.

The bank has a robust capital adequacy ratio of 15.25 per cent.

The net NPAs of the group is as low as 0.14 per cent.

The bank has a dedicated asset reconstruction division; the plan to spin it off into a separate entity has been shelved since Kotak would not be able to hold 100 per cent stake in it as per regulations.

In keeping with the trend across private banks, Kotak Bank's share price fell 3.12 per cent on the BSE to Rs 371.45 and by 2.77 per cent on the NSE to Rs 371.60.

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