Kotak Mahindra Bank is likely to report a 12 percent year-on-year rise in net profit to Rs 2,073 crore for the quarter ended December, according to an average of estimates by five brokerage firms.
The lender is also expected to report an 11.7 percent on-year growth in net interest income in the reporting quarter to Rs 4,474.7 crore aided by strong loan growth. Brokerage firm Morgan Stanley India expects Kotak Bank to report a loan growth of 16 percent in the December quarter due to pick-up in business activity.
“NII momentum expected to improve with focus on revving loan growth in addition to support from funding cost tailwinds,” said brokerage firm Prabhudas Lilladher in a preview note.
The private sector lender’s asset quality is likely to improve as Motilal Oswal Financial Services expects gross non-performing loans ratio to come at 3 percent in the quarter ended December as against 3.2 percent percent in the previous quarter. The net NPA ratio of the bank is likely to remain unchanged at 1.1 percent.
Slippages should decline significantly on a sequential basis due to underlying factors but provisions would rise sequentially since the September quarter had benefited from write-backs on healthy recoveries, said YES Securities in a preview note.
That said, Kotak Bank’s operating performance is likely to be uninspiring as pre-provision operating profit is expected to rise merely 5.4 percent on-year in the reporting quarter to Rs 3,249 crore due to the impact of higher costs.
Analysts expect the lender’s net interest margin to contract 6 basis points on a year-on-year basis to 4.45 percent.Shares of Kotak Mahindra Bank were up 1.1 percent at Rs. 1,874.8 on the National Stock Exchange at close on Thursday.
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