Kotak Mahindra Bank Q1 results: Net profit rises 32% YoY

Kotak Mahindra Bank today reported a 32 per cent year-on-year rise in its net profit to Rs 1,641.9 crore for the quarter ended June, which was below analysts’ expectations.The private sector lender reported net interest income growth of 6 per cent on-year to Rs 3,942 crore, which was also below analysts’ estimates.

Provisions and contingencies in the quarter declined to Rs 935 crore from Rs 962 crore in the year-ago quarter. However, the lender saw a deterioration in asset quality in the reported quarter.Kotak Bank’s gross non-performing loans ratio stood at 3.56 per cent in the reported quarter as against 3.25 per cent at the end of the March quarter. Similarly, the net NPA ratio expanded to 1.28 per cent from 1.21 per cent in the previous quarter.

The private sector bank’s net profit in the quarter was largely boosted by a sharp uptick in other income. Other income in the reported quarter jumped to Rs 1,583.03 crore from Rs 773.5 crore in the year-ago quarter.

Covid-related provisions as on June 30 were maintained at Rs 1,279 crore. In accordance with the Resolution Framework for Covid-19 and MSME announced by the RBI, the bank implemented total restructuring of Rs 552 crore as on June 30, Kotak Bank said.

In terms of loan growth, the quarter was tepid for the bank affected by the second wave as well as its conservative approach. Advances in the quarter grew merely 6 per cent on-year, which was lower than many of its peers.

At the same time, the current account-to-savings account ratio of the lender further improved to 60.2 per cent at the end of the June quarter from 56.7 per cent a year ago.Kotak Bank’s operating performance was sturdy as operating profit jumped 19 per cent year-on-year to Rs 3,121 crore in the reported quarter.