Kotak Bank may report 20% rise in Q1 profit; asset quality to remain stable

Private sector lender Kotak Mahindra Bank is likely to report over 20 per cent year-on-year rise in bottomline figures for the quarter ended June 30, 2017 on Thursday.

According to brokerage firm Motilal Oswal, the private sector lender may report 25.60 per cent and 23.90 per cent YoY rise in consolidated and standalone net profit for the quarter under review. Net interest income of the bank may jump 15.90 per cent YoY to Rs 2224.10 crore in Q1FY18 over Rs 1919.10 crore in the same quarter last year.

CASA retention would be a key driver of net interest income ( NII) and net interest margin (NIM).

Market mavens believe asset quality is likely to remain stable with gross non-performing assets (NPA) at 2.65 per cent and net NPA at 1.2 per cent, led by a high provision coverage ratio.

One should watch for the guidance on balance sheet growth in the upcoming quarterly numbers of Kotak Mahindra Bank. Performance on non-banking subsidiaries coupled with CASA growth should also be zeroed on.

Reliance Securities sees 30.30 per cent YoY increase in standalone net profit at Rs 967 crore for Kotak Mahindra Bank with 25.20 per cent and 38.90 per cent rise in operating profit and earnings per share.

“Operating expenses would decline sequentially as there was little one-off expenditure,” Reliance Securities said in a research report.

Shares of Kotak Mahindra Bank settled 1.76 per cent up at Rs 994.75 on Wednesday.