Although loan growth was reasonably good 22% y-o-y at R45,443 crore, higher provisions at Rs 70.62 crore, compared with a negative R2.36 crore, hurt the bottomline. KMBs net interest income rose 25% y-o- to R758 crore while other income grew 18% yoy to R250.80 crore.KMBs total income was up 30% y-o-y to R2,174.50 crore. The banks net interest margin (NIMs) was flat sequentially 4.6% in the September quarter. The management expects NIMs to remain flat in the third and the fourth quarters as well. We do not really see pressure on the margins going forward. If you compare this quarter with the previous quarter, margins have been constant, said Dipak Gupta, joint MD, KMB.
The bank attributed the higher provisions to a pool of about 5,000 bad assets, essentially home loans worth R42 crore from an NBFC. As per the policy, we have made full provisions for the amount and hope to recover this and more than what we paid, said Jamin Bhatt, Groups chief financial officer.
The asset quality of the private sector bank remained stable with gross net performing assets (NPAs) sequentially rising by just one basis point to 1.61%, and net NPAs falling to 0.75% in the September quarter from 0.8% in the JUne quarter. The net NPA figure excluded a portfolio of NPAs that the bank acquired during the quarter. The bank restructured R8 crore worth assets in the September quarter while it had restructured assets worth R31 crore in the corresponding quarter last year.
"There is some pressure in the commercial vehicle and construction equipment and some of those loans would deteriorate, Gupta said.
Total outstanding deposits at KMB were R45,463 crore, as on September 30, 2012, up 25% y-o-y. The cheaper current and savings accounts (CASA) grew 32% to R12,321 crore at the end of September 2012. KMBs capital adequacy ratio stood at 15.4% at the end of September 2012, compared with 17.8% at the end of September, 2011. KMBs consolidated profit jumped 16% y-o-y to Rs 502.17 crore and the consolidated NIM was 4.7%.