Kotak Mahindra Bank Q1 net rises 26% as provisions slide

Under the Covid resolution framework, the bank had a standard restructured fund-based outstanding of Rs379 crore, amounting to 0.14% of advances. Under the MSME resolution framework, KMB had standard restructured fund-based outstanding of Rs694 crore, or 0.25% of advances as at June 30, 2022.

Kotak Mahindra Bank Q1 net rises 26% as provisions slide
KMB’s net interest income (NII) — the difference between interest earned and interest expended — rose 19% y-o-y to Rs4,697 crore and its net interest margin (NIM), a key measure of profitability, rose 14 basis points (bps) sequentially to 4.92%, near a record high.

Private-sector lender Kotak Mahindra Bank (KMB) on Saturday reported a net profit of Rs2,071 crore in the June quarter of FY23, up 26% year-on-year (y-o-y) on the back of a drop in provisions.

KMB’s net interest income (NII) — the difference between interest earned and interest expended — rose 19% y-o-y to Rs4,697 crore and its net interest margin (NIM), a key measure of profitability, rose 14 basis points (bps) sequentially to 4.92%, near a record high.

Customer assets, which includes advances and credit substitutes, stood at Rs3.04 trillion as on June 30, up 29% y-o-y. Advances as on June 30 were at Rs2.8 trillion, up 29% y-o-y.

Deposits grew over 10% y-o-y to Rs3.16 trillion. The current account savings account (Casa) ratio as on June 30, 2022, stood at 58.1%, down from 60.2% as on June 30, 2021.

Provisions slid 97% y-o-y to Rs23.59 crore. The bank said that it held an aggregate Covid -19-related provision of Rs547 crore as of March 31, 2022. Based on the improved outlook, it reversed provisions worth Rs65 crore during Q1FY23 and Rs453 crore during Q4FY22. On a prudent basis, KMB continues to hold provisions of Rs482 crore as at June 30 against the potential impact of the pandemic.

Under the Covid resolution framework, the bank had a standard restructured fund-based outstanding of Rs379 crore, amounting to 0.14% of advances. Under the MSME resolution framework, KMB had standard restructured fund-based outstanding of Rs694 crore, or 0.25% of advances as at June 30, 2022.

KMB saw an improvement on the asset quality front in Q1, with the gross non-performing asset (NPA) ratio falling 10 bps sequentially to 2.24%. The net NPA ratio fell two bps sequentially to 0.62%.

The capital adequacy ratio of KMB as per Basel III, stood at 22.1% and the common equity tier-I (CET-I) ratio was at 21% at the end of June.

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