Kotak Mahindra Bank posted a 7 per cent rise in net profit at Rs 430 crore in the first quarter ended June 30, 2014 on the back of lower provisions and stable loan growth.

The net profit stood at Rs 403 crore in the first quarter a year ago.

“The profits have grown because we have made savings on our provisions as we got some write-backs during the quarter… We haven’t taken many risks and that’s why the growth may look muted,” said Dipak Gupta, Joint Managing Director at the bank.

The mid-sized private bank received a write back of Rs 50 crore from the treasury segment leading to sharp drop in provisions at Rs 14 crore (including Rs 8 crore provision towards unhedged exposure) from Rs 169 crore in June quarter last year.

Net interest income, the difference between interest earned and expended, rose 9 per cent year-on-year to Rs 1,002 crore (Rs 917 crore).

However, other income (fee income, foreign exchange transactions and advisory fees) dropped 14 per cent to Rs 400 crore (Rs 462 crore).

As on June 30, 2014, total advances grew 13 per cent to Rs 56,922 crore driven by corporate, agriculture and unsecured loan growth. Commercial vehicle and commercial equipment (CVCE) portfolio continued to decline 32 per cent.

“Though it has stabilized, the CVCE segment is still not comfortable at the moment,” Gupta said

Total deposits increased 17 per cent to Rs 61,407 crore due to higher current and savings account.

Gross non-performing assets (NPAs) ratio improved a tad to 1.88 per cent from 1.95 per cent, while net NPA ratio stood stable at 0.48 per cent.

In April this year, the bank has also applied for a non-binding bid to buy stake in the legally troubled Financial Technologies that owns MCX-SX.

Kotak bank shares ended at Rs 884.25, higher by 1.47 per cent over its previous close.

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