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Kotak Mahindra Bank Q2 net down 7%

Our Bureau Mumbai | Updated on October 26, 2021

Net interest income increased three per cent to ₹4,021 crore

Private sector lender Kotak Mahindra Bank reported a seven per cent year-on-year (y-o-y) drop in its standalone net profit for the second quarter of the fiscal due to higher provisions. For the quarter-ended September 30, the bank’s standalone net profit stood at ₹2,032.01 as against ₹2,184.48 crore in the same period last fiscal. However, on a sequential basis, its net profit increased by 24 per cent from ₹1,642 crore for the first quarter of the fiscal.

Its net interest income increased three per cent to ₹4,021 crore in the second quarter of the fiscal from ₹3,897 crore a year ago.

Net interest margin for the second quarter of the fiscal stood at 4.45 per cent from 4.5 per cent a year ago.

The bank’s other income increased by 26.5 per cent on an annual basis to ₹1,812.59 crore in the quarter under review.

Provisions jumped up by 27.2 per cent to ₹423.99 crore in the July to September 2021 quarter from ₹333.22 crore in the same period last fiscal.

The bank said it holds Covid-19 provisions of ₹1,279 crore which has not been utilised during the first half of the fiscal year.

Asset quality

As on September 30, 2021, gross non-performing assets stood at 3.19 per cent of gross advances as against 3.56 per cent as on June 30, 2021 and 2.55 per cent as on September 30, 2020. It was lower than ₹703.52 crore in the first quarter of the fiscal.

Net NPA was 1.06 per cent of net advances at the end of the second quarter versus 1.28 per cent at the end of the first quarter and 0.64 per cent as on September 30, 2020.

Jaimin Bhatt, Group President and Group Chief Financial Officer, Kotak Mahindra Bank said that gross slippages amounted to ₹1,293 crore and recoveries and upgrades stood at ₹1,350 crore in the second quarter of the fiscal.

In accordance with the Resolution Framework for Covid-19 related stress of individuals and small businesses, the bank has implemented total restructuring of ₹495 crore (0.21 per cent of advances) as on September 30, 2021.

In addition, in accordance with the Resolution Framework for Covid-19 related stress of MSMEs, the bank has implemented total restructuring of ₹767 crore (0.33 per cent of advances) as at September 30, 2021.

The bank implemented resolution plans in 6,522 accounts with an exposure of ₹226.66 crore under the RBI’s Resolution Framework 1.0. Of this, 27.32 crore slipped into NPA in the first half of the fiscal and the bank wrote-off ₹17.68 crore.

Under Resolution Framework 2.0, the lender has implemented resolution plans in 2,234 accounts with a total exposure of ₹268.63 crore. On account of this, the bank increased provisions by ₹37.73 crore.

Published on October 26, 2021

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