Stocks

Kotak Mahindra Bank shares continue to gain; zoom nearly 10 per cent

PTI New Delhi | Updated on October 27, 2020 Published on October 27, 2020

Shares of Kotak Mahindra Bank further gained nearly 10 per cent in early trade on Tuesday after the company reported a 22 per cent growth in consolidated net profit for the July-September quarter.

The stock jumped 9.75 per cent to Rs 1,553.90 on the BSE.

At the NSE, it zoomed 9.67 per cent to Rs 1,554.

On Monday, the shares of Kotak Mahindra Bank gained over 2 per cent.

Despite a marginal dip in loan book, reliance on credit substitutes in a market impacted by slowing economic growth helped Kotak Mahindra Bank report a 22 per cent growth in consolidated net profit at Rs 2,947 crore for the July-September quarter.

Without denying the speculation about a merger with smaller rival IndusInd Bank, the private sector lender said the objectives of a recent, Rs 7,000-crore capital raising exercise included acquisitions but added that it will be using the money judiciously.

On a standalone basis, it reported a profit after tax of Rs 2,184 crore for the July-September quarter, up 27 per cent compared to the year-ago period. Total income (standalone) rose to Rs 8,288.08 crore in the July-September period as against Rs 7,986.01 crore in the year-ago period.

The core net interest income grew by 17 per cent to Rs 3,913 crore despite a nearly 4 per cent decrease in loan book and the net interest margin coming down to 4.52 per cent from 4.60 per cent.

Its joint managing director Dipak Gupta said that for the last few months, the bank has been depending more on credit substitutes like certificate of deposits, commercial paper, non-convertible debentures for its earnings by deploying its deposits.

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Published on October 27, 2020
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