BackKotak Mahindra Bank Q2 profit rises 31%
Kotak Mahindra Bank's net profit for the quarter was at Rs941.89 crore as compared to Rs718 crore a year ago
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Mumbai: Kotak Mahindra Bank Ltd on Friday said its net profit for the September quarter rose 31.2% from a year ago due to higher net interest income (NII) and other income.
The earnings, however, are not strictly comparable to last year’s as the acquisition of ING Vysya Bank Ltd was effective as on 1 April 2015.
Net profit for the quarter was at ₹ 941.89 crore compared with ₹ 718 crore a year ago. NII, or the core income a bank earns by giving loans, increased 43.85% to ₹ 2,278.25 crore from ₹ 1,583.8 crore last year.
At the end of the quarter, the bank’s advances were at ₹ 1,11,662 crore, while deposits were at ₹ 1,23,211 crore.
“The growth has been better on the agricultural loan side and on the SME (small and medium enterprises) side. On the corporate side, once we acquired the ING Vysya Bank assets, we had to go through a process of sifting because we have exposures which are common to both the entities and we probably did not want to take as much exposure on a combined basis," said Dipak Gupta, joint managing director at Kotak Mahindra Bank.
Gupta added that as the bank completes the consolidation process it may see one or two quarters of low growth.
Other income increased to ₹ 970.50 crore from ₹ 720.46 crore in year-ago period.
Gross non-performing assets (NPAs) for the quarter stood at 2.08% compared with 1.59% in the quarter ended 30 June. Net NPAs were at 0.93% versus 0.84% in the June quarter.
Provisions and contingencies for the quarter were at ₹ 196.66 crore, compared with ₹ 321.9 crore for the June quarter and ₹ 58.22 crore in the year-ago period.
In the September quarter, the bank has not participated in any corporate debt restructuring and has not transferred any loans to asset reconstruction companies or refinanced loans under the 5/25 scheme, which allows banks to extend the tenure of infrastructure loans.
In July, Kotak Mahindra Bank had said that it would move the bad assets it acquired as part of the ING Vysya acquisition into a “bad bank" and focus on recoveries from there.
On Friday, the bank said the process is ongoing.
“It is actually too early for recovery. We are still seeing some of the bad loans getting into NPAs," said chief financial officer Jaimin Bhatt. He added that some of the addition to bad assets this quarter had come from that pool of assets.
On Friday, Kotak Mahindra Bank shares gained 3.8% to ₹ 688.60 apiece on the BSE, while the benchmark Sensex fell 0.68% to 26,656.83 points.
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