Kotak Mahindra Bank Q2 Results | Here are five key earnings highlights

The NII of the bank rose 26.81 percent on-year to Rs 5,099 crore on a standalone basis, compared to Rs 4,021 crore in the year-ago period.

Kotak Mahindra Bank on October 22 reported a 27 percent year-on-year (YoY) rise in its standalone net profit for the July-September quarter on the back of rise in net interest income (NII).

The bank reported a net profit of Rs 2,581 crore during the quarter under review, compared to Rs 2,032 crore in the corresponding quarter last year.

Analysts expected Kotak Mahindra Bank to report a 15 percent rise in net profit, powered by healthy core earnings growth and broad-based loan growth.

The private sector lender is expected to report net profit of Rs 2,332 crore for the July-September quarter, according to the average of estimates of seven brokerages polled by Moneycontrol. NII is expected to be Rs 4,875 crore, an increase of 21 percent YoY.

The NII of the bank rose 26.81 percent on-year to Rs 5,099 crore on a standalone basis, compared to Rs 4,021 crore in the year-ago period.

NII is the difference between interest earned and interest expended.

Similarly, the net interest margin (NIM) on standalone basis also grew YoY. It climbed a sharp 72 basis points (bps) to 5.17 percent in the reporting quarter.

The bank had reported improvement in its asset quality in the reporting quarter, with gross non-performing assets (NPA) down to 2.08 percent from 3.19 percent in the comparable period last year.

In absolute terms, gross NPA was Rs 6,210 crore on September 30, lower than Rs 7,658 crore last year.

Net NPA also improved marginally to 0.55 percent in July-September. On sequential basis, net NPA improved sharply; in the previous quarter it stood at 0.62 percent.

Analysts believed that Kotak Mahindra Bank will show further improvement in asset quality metrics for the July-September quarter. Analysts expect slippages to trend lower again for the reported quarter. Slippages had fallen to Rs 654 crore in the April-June quarter from Rs 736 crore in the preceding three months.

In the reporting quarter, the bank has seen a rise in deposit of 11.5 percent on-year and a marginal rise of 2.76 percent on-quarter to Rs 325,203 crore.

The bank reported a deposit of Rs 316,483 crore in the previous quarter and Rs 291,711 crore in the corresponding period last year.

Current account and savings account (CASA) ratio as of September 30, 2022, stood at 56.2 percent.

The advances of the bank rose by 25.14 percent on-year in the reporting quarter at Rs 294,023 crore.

Advances stood at Rs 280,171 crore, compared to Rs 234,947 crore in the previous year July-September quarter.

In the July-September quarter, Other Income registered a sharp rise on sequential basis to Rs 1,955 crore, compared to Rs 1,244 crore. In the comparable period last year, it was Rs 1,812 crore.

The rise in Other Income was the result of increase in fee and services income to Rs 1,760 crore in the reporting quarter.