The bank’s asset quality has improved, with gross NPAs falling nine bps from the end of December to 2.22% of the loan book.
Kotak Mahindra Bank on Monday reported a 15% year-on-year (y-o-y) rise in standalone net profit for the quarter ended March 31, 2018 to Rs 1,124 crore on the back of a 19.4% y-o-y growth in net interest income (NII) to Rs 2,579.75 crore. NII is the difference between interest earned and interest paid by a bank. Net interest margin (NIM) improved 15 basis points (bps) from the end of December to 4.35%.
Provisions at the bank rose 15% from the year-ago period to Rs 307 crore. Asset quality saw an improvement, with gross non-performing assets (NPAs) falling nine bps from the end of December to 2.22% of the loan book and net NPAs declining 11 bps sequentially to 0.98%.
Credit costs declined to 56 bps from 61 bps a year ago. Uday Kotak, managing director and chief executive officer, Kotak Mahindra Bank, said trends in the bond market will have a bearing on yields in the quarters ahead. “With picking up of the micro economy, and as long as we drive our growth carefully and conservatively, I would believe going forward we see provisioning cost trending down subject to markets on the bond side. While we have not availed the regulatory forbearance on MTM (marked-to-market) losses on bond yields, we are keeping a close eye on bond yields,” he said.
The bank’s special mention account (SMA)-2 book, comprised of loans where repayments have been overdue for between 61 and 90 days, stood at Rs 72 crore, or 0.04% of net advances. Total advances grew 23% y-o-y to Rs 2.06 lakh crore by the end of March. Corporate credit grew 25% y-o-y to Rs 60,420 crore and constituted 29% of the overall loan book.
Average savings deposits grew by 58% to Rs 61,223 crore for Q4FY18, compared to Rs 38,628 crore for Q4FY17. Average current account deposits grew by 25% to Rs 27,024 crore for the quarter, as against Rs 21,637 crore in the same period a year ago. The current account savings account (CASA) ratio as on March 31, 2018 stood at 50.8%, up from 44% as on March 31, 2017.