Private sector lender Kotak Mahindra Bank on October 22 reported a 27 percent growth in standalone profit after tax (PAT) as well as net interest income (NII) for the quarter ended September 30, 2022.
The standalone profit increased to Rs 2,581 crore during the quarter, up from Rs 2,032 crore in the corresponding period of the last fiscal, the Mumbai-headquartered bank said in its BSE filing.
Net interest income, the difference between interest earned and interest expended, climbed to Rs 5,099 crore from Rs 4,021 crore in the year-ago period, with the net interest margin expanding 72 basis points (bps) year on year (YoY) to 5.17 percent for Q2FY23.
One basis point is one-hundredth of a percentage point.
Kotak Mahindra said it recorded a 25 percent YoY growth in customer asssets, which includes advances and credit substitutes, at Rs 3.21 lakh crore as of September 2022, with advances also growing over 25 percent to Rs 2.94 lakh crore in the same period. Deposits rose by 11.5 percent to Rs 3.25 lakh crore YoY.
Non-interest income (other income) for the quarter increased by nearly 8 percent to Rs 1,955 crore driven by fee and services segment (largely general banking fees), which contributed the most to other income, which grew 24 percent YoY at Rs 1,760 crore.
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Pre-provision operating profit for the quarter at Rs 3,568 crore was up 14.4 percent from the year-ago period.
The bank reported a significant decline in provisions and contingencies at Rs 137 crore, down 68 percent from the year-ago period, though sequentially it was up 496%.
The asset quality performance also improved further in the September quarter, with gross non-performing assets (NPAs) as a percentage of gross advances falling 16 bps sequentially to 2.08 percent and the net NPA declined 7 bps QoQ to 0.55 percent.
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Kotak Mahindra Bank said slippages for the September FY23 quarter stood at Rs 983 crore (0.3 percent of advances), of which Rs 330 crore were upgraded, hence net slippages came in at Rs 653 crore. "The recoveries and upgrades during the quarter were at Rs 945 crore," it said.
The bank held total provisions of Rs 6,496 crore including Covid-19 provision of Rs 438 crore and restructuring provision of Rs 207 crore, maintaining higher than the regulatory requirement at 10 percent of the restructured book, it said.
On the consolidated basis, Kotak recorded a profit after tax of Rs 3,608 crore, growing 21 percent YoY for the quarter, with Kotak Mahindra Life Insurance segment showing 74 percent YoY growth at Rs 270 crore but the general insurance business remained in loss at Rs 17 crore against loss of Rs 16 crore YoY.
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BSS Microfinance business also registered healthy growth, coming in at Rs 70 crore, against Rs 8 crore YoY but Kotak Mahindra Prime, Kotak Mahindra Investments, Kotak Securities and Kotak Mahindra Capital reported a fall in profit YoY.
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