Comments
Kotak Mahindra Bank reported a 10 per cent decline in standalone net profit to ₹1,266.6 crore in the fourth quarter of the fiscal year 2019-20 on the back of higher provisions. Net profit amounted to ₹1,407.8 crore in the same period a year ago.
In 2019-20, the private sector lender’s net profit surged 22.2 per cent to ₹5,947.18 crore versus ₹4.865.33 crore in the previous year.
Uday Kotak, Managing Director and CEO, Kotak Mahindra Bank, noted that Covid-19 is not going to go away soon and the lockdown has been necessary from the health point of view but will have exponential economic costs.
“That is the challenge. I look at the lockdown like Abhimanyu’s Chakravyuh; every company is dealing with it,” he told reporters in a post results call.
The bank’s total income grew 8.1 per cent to ₹8,294.07 crore for the quarter ended March 31, 2020 from ₹7,672.56 crore a year ago.
Net interest income surged 17.2 per cent to ₹3,560 crore in the January to March 2020 quarter from ₹3,036 crore in the same period a year ago. Net interest margin for the fourth quarter stood at 4.72 per cent.
Other income surged 16.2 per cent to ₹1,489.39 crore in the quarter under review.
“The bank has made a Covid-19 related general provision of ₹650 crore, which is higher than the RBI requirement,” Kotak Mahindra Bank said in a statement on Wednesday.
Provisions for the quarter surged to ₹1,047.47 crore from ₹171.26 crore a year ago.
Gross non-performing assets stood at ₹5,026.89 crore as on March 31, 2020 or 2.25 per cent of gross advances against 2.14 per cent as on March 31, 2019.
Net NPAs amounted to ₹1,557.89 crore or 0.71 per cent of net advances as on March 31, 2020, compared to 0.75 per cent a year ago.
Kotak said the lending business will undergo a very serious scrutiny and said he expects significant consolidation in the financial sector in the next few months and years.
Capital-raise
On the recent board approval to raise equity capital through issuance of 6.5 crore equity shares, he said the bank is awaiting shareholder approval for the capital-raise on May 25. “When opportunities come, we don’t want to be hunting for capital,” he said. The bank has approval from the Board to raise as much as ₹7,500 crore.
Advances as on March 31, 2020 grew 7 per cent to ₹2.19-lakh crore, compared to ₹2.05-lakh crore a year ago.
The bank said that in 2019-20, about 44 lakh ‘811’ accounts were opened. “Accounts continued to be opened in April and May 2020 during the lockdown,” it further said.
The bank’s scrip closed 2.35 per cent higher at ₹1,186.50 apiece on BSE.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.