Private sector lender Kotak Mahindra Bank’s standalone profit rose 36.6% y-o-y to Rs 464.5 crore as growth in corporate lending and property loans showed a marked improvement in the same period.
Net interest income rose 16% y-o-y to Rs 1,060 crore as net interest margins (NIM) remained relatively stable at 4.7%, a fall of 10 bps. Other income stood at Rs 494 crore, a jump of 65% y-o-y.
“Over the last two months, we have seen the impact of some level of policy initiatives starting to trickle down into demand,” Dipak Gupta, joint managing director, Kotak Mahindra Bank, said.
“We are expecting some degree of movement in growth now. Initial growth drivers have come from corporate sector and you can see some very, very early signs of growth on the retail side,” added Gupta. “Hopefully once corporate sector picks up, we will see more demand on the retail side.”
Advances rose 20% y-o-y to Rs 64,641 crore while savings deposits rose 34% to Rs 73,066 crore in the same period. Revenue from corporate banking rose 33% to Rs 25,933 crore, while home loans and credit against property rose 20% to Rs 13,738 crore. The company continued to reduce its emphasis on the commercial vehicles and construction equipment segment, with revenue falling 16% y-o-y to Rs 5,027 crore.
Asset quality deteriorated, and the gross non-performing assets (NPAs) stood at Rs 1,219.8 crore or 1.87% against gross advances. The bank posted a net NPA of Rs 629.8 crore or 0.97% against net advances.
Standard restructured loans at the end of December quarter was Rs 159.1 crore or 0.25% of net advances.
On November 21, the Uday Kotak-led bank had announced merger with ING Vysya Bank, with the deal valued at approximately Rs 15,000 crore. While the shareholders of both banks have approved the merger, the deal is awaiting the nod of various regulatory authorities. Gupta said they still anticipate the deal to conclude by April 1.
The bank also announced its foray into the general insurance business by setting up a subsidiary, in the quarter.