Private sector lender Kotak Mahindra Bank on Wednesday reported a standalone net profit of Rs 879.76 crore for the October-December quarter, up 38.6% year-on-year, on the back of improved net interest margin and a fall in provisions. The bank’s total income came in at Rs 5,377.8 crore, up 11% year-on-year, led by a rise in interest income. Net interest income, the difference between interest earned and interest paid, stood at Rs 2,050.3 crore, 16% higher than in the corresponding quarter last year. The net interest margin (NIM) expanded by 15 basis points to 4.49%.
In the quarter under review, the bank’s provisions for bad loans came in at Rs 192.1 crore, 18.3% lower year-on-year. Gross non-performing assets (NPA) as a percentage of total loans stood at 2.42%, up from 2.30% at the end of the December quarter last year. Net NPA rose by 11 bps to 1.07%.
According to Dipak Gupta, joint managing director, assets outstanding under the SMA2 (special mention account 2) category stood at Rs 242 crore.
The December quarter also saw the central government’s decision to ban specified bank notes of Rs 500 and Rs 1,000 denominations, due to which banks garnered a lot of deposits as people rushed to exchange old notes of the specified denominations.
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Kotak Mahindra Bank said it received around Rs 20,000 crore in the form of old notes in the denomination of Rs 500 and Rs 1,000.
As on December 31, Kotak Mahindra Bank’s total loans stood at Rs 1.29 lakh crore, as against RS 1.15 lakh crore at the end of the corresponding quarter last year.
Total deposits increased to Rs 1.49 lakh crore as against Rs 1.30 lakh crore at the end of December 2015.
Current account deposits and savings account deposits (daily average) grew by 25% and 40%, respectively, to Rs 20,406 crore and Rs 34,691 crore.
At the end of the quarter under review, CASA and term deposits below Rs 5 crore accounted for 76% of the bank’s total deposits.
“Demonetisation has seen a significant increase in various payment channels of the bank. The bank’s active debit card customers saw an increase of 86% in the month of December as compared to the period prior to demonetisation. The daily average for first time logins for mobile banking was up 108% and net banking was up 52%,” the bank said in a post-results statement.