Kotak Bank Q2 net profit at Rs 942 crore

MUMBAI: Even as the stress loans doubled Kotak Mahindra Bank’s consolidated net profit rose 31% beating the market expectations. In the second quarter, its consolidated net profit stood at Rs 941 crore as against market expectation of Rs 751 crore according to a poll of nine analyst by Bloomberg. On a standalone basis, however, the bank's net profit was up 28% to Rs 569 crore, but marginally below the Bloomberg poll of six analyst that expected the bank to post a net profit of Rs 586 crore. The performance of bank is not comparable with the corresponding quarter of last year since ING Vysya Bank was merger with Kotak Mahindra Bank from April 1, 2015.

Jaimin Bhatt, president and group CFO told ET that the integration of ING with Kotak will be completed by February 2016. "The corporate loan book and treasury operations are integrated, the retail piece will be done by February," he said.

Provisions rose 237% to Rs 196 crore as its share of stress loans rose. On consolidated basis, gross non-performing assets more than doubled to Rs 2829 crore (Rs 1305 crore). After making provisions, the bank’s net NPA almost doubled to Rs 1257 crore. The bank had to reverse income of Rs 62 crore since one customer did not honour a derivative deal.

He said that the bank is likely to make provisions of Rs 400 crore in coming two quarters. "The problem is in the stock...we are not seeing any new cases of stress," said Bhatt.

The loan book stood at Rs 111,662 crore and deposits were at Rs 123,211 crore. The share of low cost deposits or current and savings account was 36% as on September 2015. The net interest margin (NIM) stood at 4.3%.