Private sector lender Kotak Mahindra Bank on January 20 reported a net profit of Rs 3,005 crore for the quarter ended December 31, 2023, growing by 7.6 percent on a year-on-year (YoY) basis but falling short of analyst expectations of a Rs 3,243 crore profit.
Additionally, to comply with the Reserve Bank of India's (RBI) latest measures on alternative investment funds (AIF), the bank made a provision of Rs 143 crore.
Moneycontrol looks at the key highlights from the bank’s earnings report card:
Profit growth
Kotak Mahindra Bank's net profit for the quarter grew to Rs 3,005 crore, 7.6 percent up from Rs 2,792 crore in the corresponding quarter last year.
Also read: Kotak Mahindra Bank Q3 Results: Net profit up 7.6%, asset quality healthy
The lender's net interest income (NII) was at Rs 6,554 crore, higher than market estimations of Rs 6,434 crore. Net interest margin (NIM) of the lender came in at 5.22 percent for the quarter.
Segment wise, the lender’s home loan portfolio grew 15 percent to Rs 1.02 lakh crore from Rs 89,112 crore in the corresponding quarter last year. The credit card portfolio jumped by 52 percent to Rs 13,882 crore from Rs 9,159 crore.
Asset quality improves
The bank’s asset quality improved during the October-December period with gross non-performing assets (NPAs) at 1.73 percent, down from 1.91 percent from the year-ago quarter. Net NPA came in at 0.34 percent against 0.48 percent.
According to Motilal Oswal Financial Services, asset quality was expected to improve to 1.63 percent and Net NPA at 0.34 percent but the reported numbers missed expectations.
Also read: Kotak Mahindra Bank made contingent provision of Rs 143 crore on AIF investments
Gross slippages for the quarter stood at Rs 1,177 crore, compared to Rs 748 crore last year.
Provision on AIFs
The bank said that it has made a provision of Rs 143 crore on its AIF investments. “The bank made a Rs 143 crore provision (post-tax) on applicable alternate investment fund (AIF) investments pursuant to RBI’s circular dated December 19, 2023," the bank said in a press release.
The RBI on December 19, said that regulated entities, such as banks, non-bank lenders, and home financiers, cannot invest in alternative investment funds (AIFs) that have directly or indirectly invested in companies that have borrowed money from the lenders.
Stable credit and deposit growth
Advances of Kotak Mahindra Bank grew by 15.72 percent to Rs 3.59 lakh crore, compared to Rs 3.10 lakh crore last year. Whereas, deposits grew by 18.56 percent to Rs 4.08 lakh crore from Rs 3.44 lakh crore.
The current account and savings account (CASA) ratio of the bank stood at 47.7 percent. Average current deposits grew by 5 percent to Rs 59,337 crore compared to Rs 56,372 crore last year.
Unsecured retail advances (incl. Retail Micro Finance) as a percent of the net advances stood at 11.6 percent for the quarter, compared to 9.3 percent of total advances in the corresponding quarter last year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
