Private sector lender Kotak Mahindra Bank on July 23 reported its April-June net profit at Rs 2,071 crore, up 26 per cent year-on-year (YoY), aided by higher loan growth and lower provisions. Here are the top five key takeaways from the bank’s Q1 earnings:
Healthy loan growth
As on June 30, Kotak Mahindra Bank’s total advances stood at Rs 2.80 lakh crore, up 29 percent YoY and three percent quarter-on-quarter (QoQ).
Home loans and loans against property (LAP), accounting for Rs 80,975 crore of loans, grew 46 percent YoY and six percent QoQ respectively while corporate banking loans grew 11 per cent on year to Rs 66,633 crore. On a sequential basis, corporate loans were lower by 0.1 per cent.
Microfinance loans stood at Rs 3,650 crore as on June 30, registering over 100 percent YoY growth owing to lower base. Credit cards loans, meanwhile, grew 77 percent on year to Rs 6,819 crore as on June 30.
Deposits growth stable
While assets rose faster, deposits registered 10 percent YoY growth to stand at Rs 3.16 lakh crore as on June 30. On a sequential basis, total deposits rose 1.5 percent.
The bank’s low-cost, current account and savings account ratio (CASA) lowered to 58.1 percent as on June end from 60.2 percent a year ago.
Net interest income (NII), or the difference between interest earned and expended, rose Rs 4,697 crore, up 19 percent YoY. Net interest margin (NIM) was 4.92 percent during April-June, higher than 4.60 percent a year earlier.
Asset quality stable
Kotak Mahindra Bank’s gross non-performing asset (GNPA) ratio improved to 2.24 percent as on June end from 3.56 percent a year ago and 2.34 percent a quarter ago.
The net NPAs stood at 0.62 percent as on June end, two basis points (bps) lower than March end.
Recoveries and upgrades during the quarter ended June stood at Rs 1,295 crore, while the provision coverage ratio stood at 72.6 percent, lower than 73.2 percent a quarter ago.
Other income falls
During April-June, Kotak Mahindra Bank’s consolidated other income fell to Rs 2,494.6 crore as against Rs 4,528.8 crore a year ago and Rs 7,960.1 crore a quarter ago.
This was on account of the bank reporting a loss of Rs 1,656.54 crore on sale of investments including revaluation in insurance business.
Banks’ other income includes non-fund-based income such as commission from guarantees, letters of credit, financial advisory fees, selling of third-party products, and earnings from foreign exchange transactions, among others.
Capital ratios stable
As on June end, Kotak Mahindra Bank’s capital adequacy ratio (CRAR) stood stable at 22.15 percent while common-equity tier-I (CET-I) ratio stood at 21 percent. The lender’s CRAR was lower than 23.11 percent a year ago and 22.69 percent a quarter ago.
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