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Private sector lender Kotak Mahindra Bank reported a 26.7 per cent increase in standalone net profit to ₹2,184.84 crore from ₹1,724.48 crore in the second quarter this fiscal, led by a sharp rise in its income and lower provisions.
Total income increased by 3.8 per cent to ₹8,288.08 crore in the July to September 2020 quarter from ₹7.986.01 crore a year ago.
Net interest income for the quarter ended September 30, 2020, increased 17 per cent to ₹3,913 crore from ₹3,350 crore a year ago. Net interest margin for the second quarter was at 4.52 per cent.
Other income shot up by 18.6 per cent to ₹1,452.03 crore in the quarter under review.
Total provisions declined to ₹368.59 crore in the second quarter of the fiscal from₹407.93 crore a year ago.
“Covid-related provisions as at September 30, 2020, stood at ₹1,279 crore or 0.62 per cent of net advances,” Kotak Mahindra Bank said in a statement on Monday.
Gross NPAs
As on September 30, 2020, gross non-performing assets was ₹5,335.95 crore or 2.55 per cent of gross advances, against 2.7 per cent as on June 30, 2020, and 2.32 per cent a year ago.
Net NPAs was at 0.64 per cent of net advances versus 0.85 per cent on September 30, 2019.
“The bank has not recognised any NPAs since August 31, 2020, in line with the interim order of the Supreme Court,” it said, adding that if the order was not given effect to, then GNPA would have been 2.7 per cent and Net NPA 0.74 per cent. The bank has, however, made provision for such advances.
The bank’s loan book, however, fell by four per cent to ₹2.04 lakh crore at the end of the second quarter this fiscal from ₹2.13 lakh crore a year ago.
Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank, said the bank had gone slow on lending even before the pandemic, but some parts of retail are now coming back to normal and that there are opportunities in the unsecured sector.
Capital adequacy ratio of the Bank as per Basel III, as on September 30, 2020, was 22.0 per cent and Tier I ratio was 21.4 per cent.
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