Kotak Mahindra Bank’s net profit rose 31% year-on-year in the December quarter due to a growth in its advances.
The bank posted a bottom-line of Rs 2,792 crore in the December quarter, up 8.2% on a sequential basis. The consolidated net profit grew nearly 11% year-on-year to Rs 3,995 crore.
The private-sector lender’s net advances rose 23% year-on-year to Rs 3.1 trillion as on December 31. It rose 6% on a sequential basis.
Specifically, retail microfinance loans grew 121% year-on-year, the highest among categories. Credit card portfolio rose 85% year-on-year.
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Among other categories, personal loans, business loans and consumer durable loans rose 69% year-on-year. Home loans, and loans against property rose 29% year-on-year.
Around 69% of the bank’s advances is linked to floating interest rate, while the remaining is linked to fixed interest rate, according to an investor presentation from the bank.
Broadly, customer assets rose 24% year-on-year to Rs 3.4 trillion as on December 31
Within the floating-rate book, 55% is linked to external benchmark lending rate. Unsecured retail advances comprises 9.3% of retail advances.
On the liability side, deposits rose 13% year-on-year to Rs 3.4 trillion.
Specifically, current account deposits rose 11.4% year-on-year, and term deposits rose 32% year-on-year. Current account savings ratio fell to 53.3% as on December 31 from 59.9% a year ago.
The bank’s net interest income rose 30% year-on-year to Rs 5,653 crore aided by a growth in the bank’s loans.
Net interest margin rose to 5.47% in October-December from 4.6% a year ago.
Asset quality
The bank’s gross non-performing asset ratio fell to 1.90% as on December 31 from 2.71% a year ago. It stood at 2.08% as on September 30.
Net non-performing asset ratio fell to 0.43% as on December 31 from 0.79% a year ago. It stood at 0.55% as on September 30.
The bank’s slippages were Rs 748 crore in October-December, lower than Rs 983 crore in July-September.
Recoveries and upgrades were Rs 874 crore in October-December. The bank’s provisions rose to Rs 149 crore in October-December from Rs 137 crore a year ago.
Provision coverage ratio rose to 77.6% as on December 31 from 71.3% a year ago.
“On the delinquency side, it is still very early days. One of the first few signs of changing delinquency is normally cheque bouncing. At this time, cheque bouncing percentages are also looking healthy. At this point of time, we are still some distance away from trends that things are getting worse. It is not a cause of worry,” Dipak Gupta, joint managing director, Kotak Mahindra Bank
“If you look at our numbers, the run down of capital despite the high growth is very marginal. I do not see us having an issue on raising at least in the reasonable near future.”