Kotak Mahindra Bank net up 31%; asset quality improves, NIMs flat

Written by fe Bureau | Mumbai | Updated: Jan 23 2013, 07:46am hrs
Kotak Mahindra Banks (KMB) stand alone net profit in the three months to December 2012 rose by 31% year-on-year (yoy) to R361.68 crore. The bottomline was helped by a 26% y-o-y rise in net interest income to R823 crore.

The banks net interest margin (NIMs) was flat sequentially at 4.6% NIMs will remain at the same level in the fourth quarters as well, Dipak Gupta, joint MD, KMB, said. Other income grew 8% y-o-y to R304.86 crore and total income was up 25% y-o-y to R2,399.44 crore.

The asset quality of the private sector bank improved with gross net performing assets (NPAs) sequentially falling by 15 basis points to 1.46%, and net NPAs falling to 0.64% in the October-December period from 0.75% in the July-September period.

The bank restructured Rs 9.7 crore worth assets in the quarter while it had restructured assets worth R25.1 crore in the corresponding quarter last year. Provisions rose to R42.36 crore, compared with R30.72 crore last year.

Total advances stood at R50,245 crore, a 26% y-o-y rise. The banks advances to companies grew 24% y-o-y, while its auto loan advances grew 25%. Meanwhile, commercial vehicles and construction equipment segment grew only by 7%.

There has been very little project financing requirement and the corporate loan book growth has mostly come from working capital, said Gupta, adding that most of the loan growth came from wholesale and agriculture segments. He also said that the commercial vehicle and construction equipment segment was still under stress. The bank is targeting a credit growth of 20%-25% y-o-y for FY2012-13.

Deposits rose 34% to R51,524 crore with cheaper current account and savings accounts up 26% to R13,359 crore at the end of December 2012. KMBs capital adequacy ratio stood at 15.63% at the end of third quarter, compared with 16.87% last year. Consolidated profit jumped 26% y-o-y to R585.78 crore and consolidated NIM was 4.6%.