Kotak Mahindra Bank Ltd on Monday reported a 23.6% year-on-year increase in its standalone net profit for the December quarter to Rs1,595.90 crore, largely led by higher other income and lower tax expenses. Sequentially, however, net profit declined 7.5%.
Asset quality weakened during the quarter, with gross non-performing assets (NPAs) increasing 31.1% year-on-year to Rs5,413.20 crore. Gross NPAs as a percentage of advances for the quarter was at 2.46% compared with 2.32% a quarter ago and 2.07% a year ago. The bank added fresh bad loans worth Rs1,062 crore of which one-third is constituted by corporate loan accounts.
Provisions and contingencies of the lender stood at Rs444 crore during October-December, up 8.5% from Rs407.93 crore in the last quarter. The bank's provision coverage ratio stood at 64%.
The private lender’s net interest income (NII) rose 17.2% year-on-year to Rs3,429.53 crore during October-December. On a quarterly basis, NII rose 2.4%. The bank's loan book growth at multi year low of 10% year-on-year at Rs2.16 lakh crore mainly due to slowdown in commercial vehicle and construction equipment.
“The opportunity looks better. However still limited to few players. With nominal growth rates picking up, credit growth should pick up. For the financial year end we are looking at a credit growth in the mid teens," said Deepak Gupta, joint managing director, Kotak Mahindra bank..
Other income surged 37.34% from a year ago to Rs1,341.43 crore during the reporting quarter.
Lower tax outgo also boosted the lender’s bottomline. Tax expenses stood at Rs348.17 crore, down 48.8% from a year ago.