Kotak Bank Q1 results: Profit falls 9% YoY to Rs 1,244 crore; provisions climb three folds to Rs 962 crore

Kotak Mahindra Bank on Monday reported an 8.51 per cent year-on-year (YoY) fall in net profit at Rs 1,244.45 crore for the quarter ended June 30. The lender had posted a net profit of Rs 1,360.20 crore in the corresponding quarter last year.

Analysts in an ET NOW poll had projected a net profit of Rs 1,300 crore.

Provision and contingencies spiked 3 times to Rs 962.01 crore during the quarter under review. The figure stood at Rs 316.76 crore in the same period last year.


Net interest income (NII) increased by 17.81 per cent YoY to Rs 3,723.85 crore.

Kotak Mahindra Bank	Figures in Rs	% change (YoY)
Profit	1,244.45 crore	- 8.51
Provision and contingencies	962.01 crore	+ 203.7
NII	3,723.85	+ 17.81

Asset quality of the lender deteriorated during the quarter as percentage of gross non-performing assets (NPA) stood at 2.70 per cent against 2.25 per cent in the preceding quarter ended March 31.

Likewise, percentage of net NPAs increased to 0.87 per cent from 0.71 per cent on quarter-on-quarter basis.

The bank said continued slowdown in economic activities has impacted lending business, fee income generation from sale of third party products and usage of debit and credit cards.

“This slowdown may impact customer defaults and consequently increase in provisions at the group level. There is a high level of uncertainty regarding the time required for life and business to get normal,” Kotak Mahindra Bank said in a release.

The private sector lender made an additional Covid-19 related general provision of Rs 616 crore in Q1FY21.

Covid related provisions as at June 30 stand at Rs 1,266 crore (0.62 per cent of net advances). Total provisioning towards advances (including specific, standard and Covid provisions) is higher than the GNPA of the bank, it said.