Money & Banking

Kotak Mahindra Bank Q4 net jumps 29%; board approves 1:1 bonus issue

Beena Parmar Mumbai | Updated on March 12, 2018 Published on May 05, 2015

UDAY KOTAK, Executive Vice-Chairman and MD, Kotak Mahindra Bank



Non-interest income doubling also helps drive up profit

Driven by healthy growth in corporate loans and non-interest income, Kotak Mahindra Bank posted a 29 per cent jump in its standalone net profit for the fourth quarter ended March 2015 at ₹527 crore.

India’s fourth-largest private sector bank had logged a net profit of ₹407 crore in the year-ago period. For the full year, the net profit grew 24 per cent to ₹1,866 crore.

Economy improving

“Our corporate loan growth (40 per cent increase) has come from working capital and transaction banking while there is still no demand for project financing.

“However, from one year ago to today, the absolute reality in the economy is better. It will be a steady, gradual and gradient growth with realistic expectations,” said Uday Kotak, Executive Vice-Chairman and Managing Director, Kotak Mahindra Bank. While the bank’s tractor financing growth was slower to 8 per cent, its commercial vehicles and commercial equipment (CV/CE) portfolio de-grew marginally. . Net interest income (the difference between interest earned and interest expended) grew 16 per cent to ₹1,123 crore while non-interest income almost doubled to ₹668 crore in Q4 FY15 from ₹340 crore in the year-ago quarter.

Asset quality also improved as gross non-performing assets (NPA) declined to 1.85 per cent of total gross loans as on March 2015 quarter from 1.98 per cent in the March 2014 quarter, sequentially down from 1.87 per cent in the December quarter.

Bonus issue

To commemorate 30 years of operations of the Kotak Group and as a welcome gesture to the ING Vysya shareholders, the bank’s board approved the issue of bonus shares in the ratio of one equity share for every share held, subject to approval of the shareholders at its annual general meeting. “This performance is far above peers and coupled with the 1:1 bonus announced should continue to excite investors.

“Now, the near-term challenge is the integration with ING Vysya and the first two quarters will go into cleaning up the books and making the structural changes,” said Ravi Shenoy, AVP-Midcaps Research, Motilal Oswal Securities.

The bank would report the merged entities’ (following the merger of ING Vysya Bank with Kotak Bank) financial results in the first quarter FY16.

The board also recommended a dividend of ₹0.90 a share.

Consolidated performance

On a consolidated basis, Kotak group posted a 38 per cent rise in profit after tax at ₹913 crore for Q4 FY15 compared with ₹663 crore in Q4 FY14.

The consolidated results include profit from Kotak Securities (PAT up 118 per cent), Kotak Mahindra Investments (150 per cent), Kotak Old Mutual Life Insurance (17 per cent) and Kotak Mahindra Prime (13 per cent), among others.

Post-results, the shares of Kotak Bank surged over 6.5 per cent to end at ₹1,423.65 apiece on the BSE.

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Published on May 05, 2015
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