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Kotak Mahindra Bank Q2 profit falls 37%

Kotak Mahindra Bank Q2 profit falls 37%
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First Published: Fri, Oct 31 2008. 10 53 PM IST
Updated: Fri, Oct 31 2008. 10 53 PM IST
Mumbai: Private sector lender Kotak Mahindra Bank Ltd blamed higher operating expenses and investments in new business segments such as credit cards for a 36.50% drop in its second-quarter profits, though its income rose nearly 13%.
Net profit for the three months to 30 September fell to Rs47.86 crore from Rs75.38 crore a year ago, while total income rose to Rs806.77 crore from Rs714.16 crore.
Net interest margin stood at 6%, against 5.8% last year, while non-interest income, or earnings from fees and commissions, halved to Rs60.64 crore from Rs122.34 crore.
“We have invested close to Rs22 crore in our credit card business. The bank started customer acquisition in May and we have made investments in the business, which has affected the profits of the bank,” said executive director Dipak Gupta.
The bank launched this business in April and had issued about 55,000 credit cards till September.
“The capital markets business has also been subdued during the quarter,” Gupta said, adding the bank has been cautious in its lending. “We are seeing some slowdown and we are consciously going slow on loan growth, particularly on personal loans.”
The bank’s growth would “depend on the liquidity situation”, he added.
The lender’s capital adequacy ratio stood at 17.22%, and bad loans increased to 1.93% from 1.85%. Loan portfolio grew by 32.60% to Rs17,040 crore, while deposits increased 12% to Rs16,140 crore.
Current and saving account deposits comprised 27% of total deposits, against 26% as on 30 September 2007.
The bank’s shares closed at Rs336.90, up 3.3%, at the Bombay Stock Exchange on Friday, while the benchmark Sensex index rose 8.22% to 9,788 points.
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First Published: Fri, Oct 31 2008. 10 53 PM IST