Kotak Mahindra Bank (KMB) reported a 24 per cent year-on-year (y-o-y) increase in second quarter (Q2 FY24) standalone net profit at ₹3,191 crore on the back of healthy growth in net interest income and other income.

The private sector bank reported a net profit of ₹2,581 crore in the year-ago quarter.

Net interest income (difference between interest earned and interest expended) in the reporting quarter is up about 23 per cent y-o-y at ₹6,297 crore against ₹5,099 crore in the year-ago quarter.

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Other income, including fee-based income, treasury income and recovery in written-off accounts, rose 26 per cent y-o-y to ₹2,315 crore (₹1,832 crore).

Net interest margin (interest income-interest expense/total assets) rose to 5.22 per cent from 5.15 per cent a year ago.

Gross non-performing assets (GNPAs) improved to 1.72 per cent of gross advances at the end of September 2023 against 1.77 per cent at the end of June 2023. Net NPAs position, too, improved to 0.37 per cent of net advances against 0.40 per cent. “Our slippages in this quarter were at Rs 1314 crore (from Rs 1,200 crore in the previous quarter). But about Rs 300 crore worth of assets were upgraded in this quarter itself. So, the net slippages were at about Rs 1,000 crore.....We are watchful on certain segments, particularly on the unsecured retail side,” said Jaimin Bhatt, President & Group CFO .

Dipak Gupta, Managing Director & CEO, observed that unsecured retail portfolio (credit cards, personal loans, MFI loans, etc) account for about 11 per cent of the bank’s overall advances. This was 10.7 per cent a quarter ago. “We are comfortable growing this and taking this proportion to early to mid-teens. So, we are on track there. The provisioning on this portfolio is in excess of 85 per cent. So, we are pretty much covered there,” he said.

Advances up

Advances increased 21 per cent y-o-y to ₹3,57,012 crore as on September 30, 2023 from ₹296,117 crore as on September 30, 2022, with retail and micro-finance recording the highest growth (80 per cent), followed by credit cards (59 per cent), others (50 per cent), personal loans, business loans and consumer durables (35 per cent) among others.

Deposits rose 23 per cent y-o-y to stand at ₹4,00,963 crore at the end of September 2023. The share of current account savings account deposits (CASA) declined to 48.3 per cent of total deposits from 56.20 per cent.

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Kotak Mahindra Bank’s consolidated Q2 FY24 net profit increased by about 24 per cent to ₹4,423 crore (₹3,579 crore).

The consolidated net profit includes the results of subsidiaries such as Kotak Mahindra Prime, Kotak Securities, Kotak Mahindra Capital Company, Kotak Mahindra Life Insurance Company, Kotak Mahindra General Insurance Company and Kotak Mahindra Asset Management Company among others.

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