Kotak Mahindra Bank profit rises, asset quality worsens
Premium- Net profit rises 32% year on year to Rs1,642 crore at the end of June quarter owing to higher other income
Kotak Mahindra Bank reported a 32% year on year rise in net profit to ₹1642 crore at the end of June quarter owing to higher other income. The bank had reported net profit of ₹1244.45 crore in the year ago period.
Other income doubled to ₹1583 crore at the end of June quarter compared to ₹773 crore a year ago.
Net Interest Income (NII) rose 6% year on year to Rs. 3,942 crore for the first quarter from Rs. 3,724 crore a year ago. Net interest margin stood at 4.6%.
The bank’s asset quality deteriorated this quarter with gross non-performing assets ratio at 3.56% compared with 3.25% as of March. Net NPA ratio marginally rose to 1.28% from 1.21% in March. The bank added ₹1500 crore of fresh bad loans in the quarter, largely contributed by agriculture and commercial vehicle loans.
As on June 30, loans that are overdue for more than 60 days but are not NPA rose to ₹430 crore from ₹110 crore at the end of March, indicating higher stressed assets. Restructuring owing to the Covid-19 pandemic rose to ₹552 crore in the first quarter from ₹435 crore as of March.
“This time around we had customers who found it difficult to repay and those who we couldn’t reach out well in time. This time is looking far better than what it was last. But it’s too early to say. We have to be more circumspect about third wave," said Deepak Gupta, joint managing director, Kotak Mahindra Bank.
Total provisions fell 2.8% year-on-year to ₹935 crore in the June quarter. Provisions set aside for the Covid-19 pandemic stood at ₹1,279 crore, same as the preceding quarter.
Total advances rose 7% year-on-year to ₹2.17 lakh crore. Sequentially, however, outstanding advances fell 2.7%. Total deposits rose 9.2% year-on-year to ₹2.85 lakh crore in the first quarter.
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