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Treasury losses, bad loans pull down Kotak Mahindra Bank Q4 net

Beena Parmar Mumbai | Updated on March 12, 2018 Published on April 30, 2014

Bank makes ₹43 cr mark-to-market losses in treasury portfolio

Treasury loss and higher bad loans led to a 7 per cent decline in Kotak Mahindra Bank’s net profit for the fourth quarter ending March 31, 2014 at ₹407 crore.

Net interest income (difference between interest earned and expended) grew 7 per cent to ₹967 crore, while other income dipped to ₹340 crore from ₹364 crore.

During the quarter, the bank took a mark-to-market loss of ₹43 crore in its treasury portfolio. “We took a total hit of ₹200 crore on our treasury book for the full year,” said Uday Kotak, Vice-Chairman and Managing Director of Kotak Bank.

Profit was helped by a write-back in provisions of about ₹35 crore towards bad loans. Also, the net interest margins during the quarter rose to 4.9 per cent from 4.65 per cent in the year ago period.

Commercial vehicles

During the three-month period, gross non-performing assets worsened to 1.98 per cent of total loans as compared with 1.55 per cent in the year-ago quarter.

As on March 31, 2014, total advances of the bank increased by 8 per cent due to a drop in loan growth in commercial vehicles and construction equipment segment. The CVCE portfolio declined to about ₹5,000 crore from ₹8,000 crore a year ago.

On other hand, deposits grew 16 per cent on the back of growth in current and savings account.

Kotak said the stress and the NPA cycle in the banking sector seems to be bottoming out and “hopes to see improvement in FY15”.

The Bank recovered about ₹40 crore during the quarter and has bought from other banks distressed assets worth ₹2,000 crore .

The bank’s consolidated net profit was a tad weaker at ₹663 crore as against ₹666 crore in the year ago quarter. This includes profit from subsidiaries such as Kotak Mahindra Prime, Kotak Securities, Kotak Mahindra old Mutual Life Insurance and Kotak Mahindra Investments among others.

For the full year ended, the bank’s standalone profit rose 10 per cent to ₹1,503 crore, while NII was up 16 per cent at ₹3,720 crore.

Kotak bank’s scrip ended at ₹803.25 per share on Wednesday, weaker by 0.55 per cent over its previous close on BSE.

Published on April 30, 2014
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