Q3 results: Kotak Mahindra Bank’s profit up 39%, IDFC Bank’s down 21%

Kotak Mahindra Bank’s Q3 profit rose to Rs879.76 crore from Rs634.72 crore a year ago, IDFC Bank’s net profit fell 21% due to increase in provisions


Kotak Mahindra Bank’s profit in the December quarter rose on the back of higher net interest income and other income. Photo: Mint
Kotak Mahindra Bank’s profit in the December quarter rose on the back of higher net interest income and other income. Photo: Mint

Mumbai: Private sector lender Kotak Mahindra Bank Ltd on Wednesday reported a rise in quarterly net profit from a year ago, while IDFC Bank Ltd posted a decline in net profit.

December quarter net profit at Kotak Mahindra rose 38.6% to Rs879.76 crore from Rs634.72 crore a year ago, on the back of higher net interest income and other income. According to estimates of nine Bloomberg analysts, the bank was expected to post a net profit of Rs815.40 crore.

Net interest income (NII), or the core income a bank earns by giving loans, rose 16.1% to Rs2050.32 crore in the December quarter from Rs.1,766.21 crore last year.

“The positive effects of demonetization are on savings and current account growth, 5% more growth than the usual…asset growth has been muted,” said Dipak Gupta, joint managing director, Kotak Mahindra Bank.

“Kotak’s provisions were low sequentially, that has led to stabilizing of gross non-performing portfolio especially after ING-Vysa merger. A consciously low exposure to stressed sectors, granular book and focus on working capital loans enabled Kotak to keep flawless asset quality and have controlled provisioning cost,” said Darpin shah, banking analyst at HDFC Securities.

Other income increased 26% to Rs910.22 crore in the third quarter from Rs722.16 crore in the same period last year. Gross non-performing assets (NPAs) fell marginally to Rs3,177.88 crore at the end of the December quarter from Rs3,180.66 crore in the September quarter.

As a percentage of total loans, gross NPAs were 2.42% at the end of the December quarter compared with 2.49% in the previous quarter and 2.30% a year ago.

Provisions and contingencies fell 18.3% to Rs192.10 crore in the third quarter from Rs235.25 crore a quarter ago. Net NPAs rose to 1.07% in the December quarter compared with 1.20% in the previous quarter and 0.96% in the same quarter last year.

At IDFC Bank, net profit in the December quarter fell 21% from a year ago due to increase in provisions. Net profit fell to Rs.191.26 crore from Rs.242.16 crore a year ago. According to estimates of five Bloomberg analysts, the bank was expected to post a net profit of Rs.240.50 crore.

Net interest income rose 34.80% to Rs.520.77 crore in the third quarter compared with Rs.386.31 crore in the last year for the same period. Provisions almost doubled to Rs. 231.75 crore in the December quarter from Rs.122.92 crore a year ago.

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