Private sector lender Kotak Mahindra Bank on May 3 is expected to report healthy growth in profit on account of lower provisions, NII and normalised credit cost YoY with stable asset quality QoQ, but sequentially, provisions may remain elevated.
Net interest income could also see double-digit growth with pick-up in loan traction. Loan growth could be 1-3 percent YoY and 4-5 percent QoQ, while deposit growth may be 8-9 percent QoQ and over 10 percent YoY.
"Net interest income momentum of 15-16 percent YoY should continue led by lowering cost of funding & strong CASA. We expect 4 percent QoQ credit growth (up 1.2 percent YoY), and 8 percent QoQ deposit growth," said Prabhudas Lilladher.
The brokerage further said that higher provisions are likely to improve provision coverage ratio, and slippages could keep earnings lower than last two quarters, but improvement expected on YoY basis.
The brokerage sees 34 percent YoY growth in profit with 23 percent decline in provisions, and 8.6 percent QoQ decline with 35 percent rise in provisions.
According to ICICI Direct, Kotak Bank is expected to improve its growth momentum as compared to the previous quarter from 4.5-5.0 percent QoQ, which should be driven by agri, home loans, commercial vehicle segment while corporate book can also contribute in a similar fashion as last quarter.
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"Deposit growth is expected to be at 12.5 percent YoY with CASA contributing to around 59 percent to total deposits. NII is expected to show healthy 16.7 percent YoY growth aided by pick up in loan traction and around 10 bps sequential improvement in NIMs. Credit cost is expected to come in at 30 bps for the quarter," said the brokerage which sees 49 percent growth in profit YoY.
ICICI Direct expects minimal levels of restructuring during the quarter with reported gross non-performing assets expected to rise to 3.2 percent with standstill norms out of the picture now.