The Hindu Business Line : Kotak Mahindra Bank Q4 net rises 86%

Mumbai, May 9 Kotak Mahindra Bank, which reported an 86 per cent growth in fourth quarter net profits, said it has made a provision of Rs 86 crore towards ‘stressed cases’ on account of exposure to forex derivatives.

The bank said its clients have suffered marked-to-market losses of Rs 612 crore on forex derivatives deals.

Mr Uday Kotak, Vice-Chairman and Managing Director, Kotak Mahindra Bank, said the bank has no losses on account of forex derivatives, but the provision has been made to meet any liabilities arising out of these stressed cases.

The bank has no exposure to SME clients, in this regard, he said.

Total provision and contingencies for the quarter increased to Rs 87 crore (Rs 50 crore). And for the full year, the amount increased to Rs 272 crore (Rs 122 crore).

The net profit of the bank increased to Rs 69 crore (Rs 37 crore) for the quarter ended March 31, 2008. Net Interest income was higher at Rs 391 crore (Rs 205 crore), while other income declined to Rs 39 crore (Rs 87 crore).

The bank saw a fall in non-interest income on account of the higher provision and lower treasury income.

The proportion of net NPAs to total assets increased to 0.38 per cent (0.18 per cent).

The Capital Adequacy Ratio increased to 18.65 per cent (13.46 per cent).

“Our capital is significantly beefed up in relation to stressed assets and this gives us buffer in volatile times,” said Mr Kotak.

For the full year, net profit was up 108 per cent to Rs 294 crore (Rs 141 crore). The Net Interest Margin increased to 5.6 per cent (5.2 per cent).

Advances grew 42 per cent and deposits 56 per cent. “The target is to grow assets by 30 per cent in this fiscal,” said Mr Kotak.

The bank’s distressed assets portfolio was Rs 680 crore, and recoverable assets were Rs 4,000 crore. Going ahead, the bank hopes to unlock significant value from distressed assets in 2008-09 fiscal, Mr Kotak said.

Shares of Kotak Bank closed at Rs 737.15, down 5.78 per cent from the previous close of Rs 782.4 on the BSE on Friday.

Related Stories:
Kotak Mahindra Bank offers bouquet of products
Loans buoy Kotak Mahindra Q3 net

More Stories on : Financial Performance | Private Banks | Financial Performance

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page