Kotak Mahindra Bank reported a standalone net profit of ₹2,071 crore, up 26 per cent year-on-year (y-o-y), in the first quarter (Q1FY23) on the back of growth in net interest income and sharp decline provisions towards advances and other exposures.

The private sector lender had posted ₹1,642 crore net profit in the year-ago quarter. The net profit in the reporting quarter, however, was down sequentially vis-a-vis preceding (Q4FY22) quarter’s ₹2,767 crore.

On the sequential dip in net profit, Jaimin Bhatt, President & Group CFO, observed that reversal in Covid-related provisioning in the preceding quarter was much higher at ₹453 crore against ₹65 crore in the reporting quarter.

Net interest income (difference between interest earned and interest expended) was up 19 per cent y-o-y at ₹4,697 crore (₹3,942 crore).

Other income, comprising non-fund-based income such as commission earned from guarantees/ letters of credit, financial advisory fees, selling of third party products, earnings from foreign exchange transactions, and treasury income, was down 8 per cent y-o-y at ₹1,244 crore (₹1,352 crore).

Provision towards advances/others (including provisions for exposures to lo entities with Unhedged Foreign Currency Exposures) dropped 88 per cent y-o-y to ₹88.5 crore (₹725.36 crore). Net Interest Margin (NIM) improved to 4.92 per cent for Q1FY23 against 4.60 per cent for Q1FY22.

GNPA position improved to 2.24 per cent of gross advances as at June-end 2022 against 2.34 per cent as at March-end 2022. Net NPA position too improved a tad to 0.62 per cent against 0.64 per cent. Advances increased by 29 per cent y-o-y to ₹2,80,171 crore as at June 30, 2022 from ₹2,17,447 crore as at June 30, 2021.

The advances growth came on the back of the home loans & loans against property portfolio expanding by 46 per cent yoy; consumer banking (up 26 per cent); credit cards (77 per cent), commercial vehicles/ construction equipment (20 per cent), agriculture division (22 per cent); and corporate banking (11 per cent), among others.

Total deposits increased by about 10 per cent y-o-y to ₹3,16,483 crore as at June 30, 2022 from ₹2,86,560 crore as at June 30, 2021. Within deposits, the share of the low-cost current account, and savings account deposits came down to 58.1 per cent of total deposits against 60.2 per cent.

Consolidated net up 53%

The Bank reported a consolidated net profit of ₹2,755 crore in Q1FY23, up 53 per cent vis-a-vis Q1FY22 net profit of ₹1,806 crore. Consolidated net profit includes the numbers of seven subsidiaries including Kotak Mahindra Life Insurance, Kotak Securities, Kotak Mahindra Prime, and Kotak Asset Management & Trustee Company.