Kotak Mahindra Bank's net profit surged 22.3% over the same quarter of the previous year, and 59% over Q1 FY21.
In the second quarter, Kotak Mahindra Bank has also set aside a comparatively lower amount for provisions and contingencies. (Bloomberg image)
Kotak Mahindra Bank recorded a consolidated net profit of Rs 2,946.62 crore in the second quarter of the current fiscal. The bank’s net profit surged 22.3 per cent over the same quarter of the previous year, and 59 per cent over Q1 FY21, according to the financial statement of the bank. On a standalone level, the bank’s net profit surged to Rs 2,184 crore, which is 27 per cent higher than the same quarter previous year and 76 per cent higher than Q1 FY21. In the second quarter, Kotak Mahindra Bank has also set aside a comparatively lower amount for provisions and contingencies.
The bank has set aside Rs 368 crore for provisions and contingencies in Q2FY21, compared to Rs 962 crore in Q1FY21 and Rs 408 crore in Q2FY20. Even for the Covid provisions, the bank has set aside only Rs 13 crore in the September quarter, compared to Rs 616 crore in the previous quarter.
A significant reduction in slippages has also favoured the bank in improving its profitability. Slippages for the reporting quarter has come down sequentially as the lender reported slippages to the tune of Rs 264 crore in Q2 FY21, compared to Rs 796 crore in Q1 FY21 and Rs 1,091 crore in Q2 FY20. While the interest earned on advances and bills have reduced in Q2, the bank has earned nearly Rs 355 crore from investments. Also, the premiums on insurance business have nearly doubled to Rs 2,468 crore, over the first quarter.
Meanwhile, Kotak Mahindra Bank is exploring a takeover of smaller Indian rival IndusInd Bank, which may create the nation’s eighth-largest financial firm by assets, Bloomberg reported. Uday Kotak and the Hinduja family have held initial talks over the psaroposal in which the founders of IndusInd Bank could retain a stake in the lender after a deal, the report added.