Kotak Bank's cost to income ratio, excluding Kotak GI stake sale, stands at 46.3%: CFO

The bank on July 20 reported a net profit of Rs 6,250 crore in the April-June quarter of fiscal year 2025, 81 percent higher than Rs 3,452 crore in the corresponding quarter last year.

Private sector lender Kotak Mahindra Bank's cost to income ratio excluding the income it incurred from the 70 percent stake sale in Kotak General Insurance stood at 46.30 percent, said Devang Gheewala, Chief Financial Officer (CFO).

"The cost to income ratio stood at 46.30 percent if we exclude the exception item of general insurance towards cost to income," Gheewala said in a response to Moneycontrol's queries.

The 200 basis points (bps) increase may be due to the curbs on the bank's digital business.

The bank's total cost to income ratio, including the income from Kotak GI sale, till the April-June quarter of the 2025 fiscal stood at 34.10 percent, falling from 44.49 percent in the corresponding quarter last year.

The cost-to-income ratio is a metric which compares a bank's operating costs to its operating income. A lower ratio indicates greater operational efficiency, conversely, a high ratio suggests that costs are increasing faster than income, potentially signalling challenges for the bank.

The bank on July 20 reported a net profit of Rs 6,250 crore in the April-June quarter of fiscal year 2025, up 81 percent against the Rs 3,452 crore reported in the corresponding quarter last year. The lender's net profit saw a boost of Rs 3012 crore in its profit after tax due to the bank's stake sale in its insurance subsidiary Kotak General Insurance to Zurich Insurance Group.

An average estimate of eight brokerages had expected a net profit of Rs 3,702 crore.

Keeping the insurance stake aside, the net profit for the group stood at Rs 4,435 crore, the bank said in its investor presentation.

The net interest income of the lender was Rs 6,842 crore, 10 percent up from Rs 6,234 crore last year. The brokerage estimates had expected an NII of Rs 7,087 crore.

The lender’s gross non-performing assets (GNPA) stood at 1.39 percent in Q1FY25 versus 1.77 percent last year. NNPA stood at 0.35 percent versus 0.44 percent last year.

Advances of the bank grew 20 percent YoY to Rs 4.05 lakh crore compared to Rs 3.37 lakh crore on June 30, 2023. Unsecured retail advances of the bank (including retail microcredit) as a percent of net advances stood at 11.6 percent till Q1FY25.

The lender's total deposits grew to Rs 4.35 lakh crore in Q1FY25, up by 21 percent compared to Rs 3.61 lakh crore last year. Current account and savings account deposits (CASA) of the bank grew 3 percent YoY and stood at Rs 1.94 lakh crore. On a sequential basis, CASA deposits saw a 5 percent drop.