Kotak Mahindra Bank on Thursday reported a 23% rise in its standalone net profits at Rs 912.73 crore for the first quarter of the current financial year, compared with `741.97 crore in the same period last fiscal.
The net interest income (NII) — the difference between interest earned and interest expended — rose 17.01% to Rs 2,245.55 crore on a year-on-year basis.
The bank’s asset quality remained stable, with its gross non-performing assets (NPAs) as a percentage of gross advances standing at 2.58% in the first quarter, against 2.5% in the same period last year.
On a sequential basis, gross NPAs improved marginally.
Net NPAs as a percentage of net advances rose by four basis points in the first quarter to 1.25% on a Y-o-Y basis. Here too, there was a marginal improvement on a sequential basis.
Kotak bank said it has total exposure of Rs 236 crore to four of the 12 accounts identified by the Reserve Bank of India for insolvency proceedings. All four accounts were inherited from ING Vysya Bank at the merger on April 1, 2015. Kotak Mahindra Bank on its own has no exposure to any of these 12 accounts, the lender said.
The bank made provisions and contingencies of Rs 203.74 crore, compared with Rs 179.51 crore in the same period last year.
It pointed out that as on June 30, 2017, restructured loans considered standard were down to `80 crore, i.e. 0.06% of net advances. As on June 30, 2017, the bank’s SMA2 outstanding stood at Rs 305 crore, 0.21% of net advances.
The net interest margin (NIM) stood at 4.5%, up from 4.4% in the same period last year.
Kotak Bank saw an 8.65% rise in its total income to Rs 5,562.66 crore in the quarter under review. The operating profit rose 21.32% to Rs 1,595.36 crore.
The bank’s advances as on June 30, 2017 were up 18% Y-o-Y to Rs 1.42 lakh crore.
The overall capital adequacy ratio was above 19% and the bank continues to scout for opportunities on inorganic growth, stressed asset purchases and loan book increase.
Sellers’ expectations on the pricing are an impediment on the stressed asset buys and it will take up to a year for an increase in transactions, the bank said.
Chief financial officer Jaimin Bhatt said introduction of the marginal cost of funds-based lending rate is putting pressure on the margins and the bank will end FY18 with a NIM of 4.2-4.3%.
The scrip on Thursday closed down 1.44% at Rs 980.40 on the BSE.
(With PTI inputs)