Total provisions, including specific, standard and Covid-19 provisions, were at Rs 7,637 crore, accounting for the total gross non-performing assets (NPAs) of the bank. The bank’s provision coverage ratio (PCR) stood at 67% at the end of September.
Private sector lender Kotak Mahindra Bank (KMB) on Tuesday reported a net profit of Rs 2,032 crore in the September quarter of FY22, down 7% year-on-year (y-o-y) owing to a 27% rise in provisions on a y-o-y basis to Rs 424 crore.
KMB’s total Covid-19 related provisions stood at Rs 1,279 crore as on September 30, 2021, none of which have been utilised during the current financial year. Total provisions, including specific, standard and Covid-19 provisions, were at Rs 7,637 crore, accounting for the total gross non-performing assets (NPAs) of the bank. The bank’s provision coverage ratio (PCR) stood at 67% at the end of September.
As of September 30, the bank had restructured loans worth Rs 495 crore, or 0.21% of its advances, under the two rounds of resolution of pandemic-related stress. The value of micro, small and medium enterprises (MSME) loans that have undergone restructuring jumped 143% between June and September to `767 crore, accounting for another 0.33% of advances.
KMB’s net interest income (NII) — the difference between interest earned and interest expended — rose 3.2% y-o-y to Rs 4,021 crore and its net interest margin (NIM), a key measure of profitability, fell 15 basis points (bps) sequentially to 4.45%.
Customer assets, which include advances and credit substitutes, stood at Rs 2.56 lakh crore as on September 30, up 17% y-o-y. Advances were at Rs 2.35 lakh crore, up 15% y-o-y.
Dipak Gupta, joint managing director, KMB, said the healthy growth in advances should not be seen as the lender shedding its conservative approach. “The conservative approach remains. What you’re seeing really is an environment conducive to supporting healthy growth,” Gupta said. Some segments, like lending to commercial vehicles, continue to see challenges, he said.
Total deposits grew by 11.5% y-o-y to Rs 2.92 lakh crore. Savings account (SA) deposits grew 13% y-o-y and current account (CA) deposits grew 32% y-o-y. The CASA ratio as on September 30, 2021, stood at 60.6%, up from 57.1% as on September 30, 2020.
The bank recognised gross slippages of Rs 1,293 crore during Q2FY22, compared to Rs 1,537 crore in Q1FY22. Recoveries and upgrades were to the tune of Rs 1,350 crore, up from Rs 700 crore in the previous quarter. Special mention accounts (SMA)-II, loans where repayments are overdue between 61 and 90 day, stood at Rs 388 crore.
KMB saw an improvement on the asset quality front in Q2, with the GNPA ratio falling 37 bps sequentially to 3.19%. In absolute terms, gross NPAs stood at Rs 7,658 crore at the end of September. The net NPA ratio fell 22 bps sequentially to 1.06%.
The capital adequacy ratio of KMB as per Basel III stood at 21.8% and the tier-I ratio was at 20.8%. KMB’s shares on the BSE ended 2.48% higher than their previous close at Rs 2,210.55 on Tuesday.