What frontloading of provisions means for Kotak Bank

It is prudent of the bank management to have decided to frontload the provisions but on the whole, the quality of balance sheet and earnings seems to be robust, says Lalitabh Srivastava, AVP-Research, Sharekhan.

Kotak Mahindra Bank numbers largely seem to be in line. Does anything stand out for you?
I would agree that the numbers are largely in line with expectations. The frontloading of provisions is something I like because there is a dispensation or a court order and which is why two different NPA numbers have been reported. Considering that the bank is providing the numbers on a proactive basis, that is a positive thing.

Going through the presentation, around 31 bps of SMA-2 and restructuring of around 38 bps are fairly manageable and healthy numbers. Last quarter Mr Kotak had indicated that advances growth is going to pick up from here and we see that on a sequential basis also, the advances growth has been fairly healthy. That is an encouraging sign according to me.

It is prudent of the bank management to have decided to frontload the provisions but on the whole, the quality of balance sheet and earnings seems to be robust. So, in my view, it is a fairly good set of numbers.