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Our Bureau

Mr Uday Kotak, Executive Vice-Chairman and Managing Director, KMB

Mumbai , June 7

KOTAK Mahindra Bank Ltd has announced a bonus issue, offering three shares for every two held. The bank has reported a 12-per cent increase in net profit at Rs 23.08 crore for the quarter ended March 31, 2005 against Rs 20.59 crore in the corresponding quarter of the previous year due to higher retail and fee income.

Total income for the fourth quarter was Rs 171.47 crore (Rs 117.23 crore). Net interest income was Rs 67.26 crore (Rs 66.89 crore). The board has declared a dividend of Rs 1.25 per share (on a face value of Rs 10).

The bonus issue would take up the paid-up capital of the bank to over Rs 300 crore, which will satisfy the licensing condition of RBI, said Mr Uday Kotak, Executive Vice-Chairman and Managing Director, Kotak Mahindra Bank.

For the financial year 2004-05, the bank reported an 8 per cent rise in net profit at Rs 84.89 crore (Rs 78.73 crore). Total income was Rs 552.38 crore (Rs 383.13 crore). Net interest income was Rs 225.48 crore, up 32 per cent (Rs 170.87 crore).

The capital adequacy ratio was at 12.8 per cent (15.25 per cent). The wealth management division, which was carved out as a separate division last year, had equity assets worth Rs 3,800 crore as on March 31, 2005 against Rs 2,000 crore last year, Mr Kotak said.

The bank currently has 38 full-fledged branches in 17 cities and plans to increase the number of branches to 100 by March 2007. Speaking about the growth plans in the coming fiscal, Mr Kotak said the bank would look at increasing its income through four divisions — the international business for which it has set up three subsidiaries, an asset recovery business, a private equity fund and a real estate venture fund.

"There is a huge segment of the mass affluent people in the Middle East who want to invest in India. People of non-Indian origin too are showing significant interest in India. We want to cater to this segment of people," Mr Kotak said. As of now, the bank has subsidiaries in the UK, the US, Mauritius and Dubai. The other overseas forays too will be through subsidiaries, he added. The bank bought Rs 1,000 crore worth non-performing loans last year at a significant discount mostly from private sector banks and some foreign banks. The bank also announced the consolidated results for the group, which include Kotak Mahindra Asset Management Company, Kotak Mahindra Primus, OM Kotak Mahindra Life Insurance Company, Kotak Mahindra Capital Company and Kotak Securities.

The consolidated net profit for the year March 2005 was lower at Rs 170.91 crore against Rs 174.16 crore last year, due to lower treasury earnings.

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