Kotak Bank Q1 net rises 26% on loan growth

Kotak Mahindra Bank reported a 26% year-on-year rise in standalone net profit for the June quarter, helped by a sharp decline in provisions and steady loan growth, even as net interest margin remained under pressure.

The private sector lender posted a profit after tax of ₹4,123 crore for the quarter ended June 30, compared with ₹3,282 crore a year earlier.

Net interest income (NII) rose 9% year-on-year to ₹7,928 crore from ₹7,259 crore, while operating profit increased 10% to ₹6,131 crore.


Net interest margin (NIM) stood at 4.53% during the quarter, compared with 4.65% a year ago and 4.67% in the preceding quarter. The bank management said margins have largely stabilised after adjusting for the seasonality in the March quarter.

Provisions declined 45% year-on-year to ₹668 crore from ₹1,208 crore, while annualised credit cost improved to 46 basis points from 93 basis points a year earlier.

Net advances grew 15% year-on-year to ₹5.12 lakh crore as of June-end, while customer assets, including credit substitutes, rose 16% to ₹5.71 lakh crore.

The lender saw 15% growth in its corporate loan book and is one of the focus segments of the bank. It wants to keep this segment growing in line with the market.

Deposits grew 12% YoY to ₹5.73 lakh crore where CASA ratio moderated to 40.3% from 40.9% a year ago. Asset quality improved during the quarter with gross NPAs declined to 1.18% from 1.48% a year earlier, while net NPAs fell to 0.27% from 0.34%.

Slippages dropped 27% year-on-year to ₹1,321 crore, and the provision coverage ratio improved to 78%. However, fresh slippages rose sequentially to ₹1,321 crore from ₹1,018 crore.

Bank's capital adequacy ratio was at 22.8% and a common equity tier-1 ratio of 22.4%. On a consolidated basis, Kotak Mahindra Bank reported a 23% rise in net profit to ₹5,480 crore from ₹4,472 crore a year earlier.