During the quarter, Kotak Mahindra Bank completed the acquisition of BSS Microfinance
Private sector lender Kotak Mahindra Bank’s consolidated net profit went up 20 per cent from Rs 1,202 crore in July-September 2016 to Rs 1,441 crore in the quarter ended September 2017 (Q2) on higher net interest income.
Other income grew a muted 6.7 per cent y-o-y to Rs 3,074 crore. On a standalone basis, its net profit went up 22 per cent year-on-year (y-o-y) to Rs 994 crore.
Net interest income (NII), the difference between interest earned and interest expended, rose by 16 per cent on a standalone basis to Rs 2,313 crore in September 2017 quarter, from Rs 1,995 crore in Q2 FY17, helped by a 42 per cent growth in average current and savings deposits. However, its net interest margin (NIM) was down 14 basis points (bps) y-o-y and 13 basis points q-o-q to 4.33 per cent in Q2 FY18.
At a consolidated level, too, net interest margin eased to 4.30 per cent for the reporting quarter from 4.46 per cent a year ago.
Advances for the standalone entity rose by 21 per cent in September 2017 quarter at Rs 1,52,574 crore from Rs 1,26,015 crore in July-September 2016. Dipak Gupta, joint managing director, Kotak Mahindra Bank, said, "For us, all three segments — retail, wholesale and corporate — are important, and all three have seen growth.”
Gross standalone non-performing assets (NPA) stood at 2.47 per cent in September 2017, against 2.49 per cent a year ago. Provisions and contingencies grew marginally to Rs 216 crore from Rs 197 crore in the September 2016 quarter. Jaimin Bhatt, chief financial officer, Kotak Mahindra Bank, said, “We took a hit on account of the agri portfolio, where we had to write off some loans and interest reversal for 18 months.”
Standalone figures cover banking operations, while consolidated figures capture the performance of group entities such as insurance and securities, as well as banking.
The capital adequacy ratio (CAR) for the standalone entity was 18.36 per cent and CAR, including unaudited profits for Q2, was 19.4 per cent at the end of September 2017. Current and savings accounts deposits, which are typically low-cost ones, accounted for 47.8 per cent of total deposits compared with 39 per cent a year ago.
During the quarter, Kotak Mahindra Bank completed the acquisition of BSS Microfinance. In October, it acquired 26 per cent stake in Kotak Life Insurance from Old Mutual Life Insurance. Kotak Mahindra Bank said it was planning to expand its branch network from 1,362 to 1,400 branches by March 2018. The bank also said its completely digital account, 811, which was launched six months ago, has attracted 10.5 million customers. Also, the statement said, 77 per cent of its recurring deposits and 60 per cent of term deposits were sourced digitally.
IDFC Bank net slides 40% to Rs 234 crore
IDFC Bank reported a 40 per cent y-o-y decline in net profit to Rs 233.66 crore for the second quarter ended September 2017 because of lower income and higher expenses.
Total income fell 5.1 per cent to Rs 2,365 crore for the quarter, against Rs 2,493 crore in the year-ago period, IDFC Bank said in a BSE filing.
Its total expenditure went up 11 per cent to Rs 2,120 crore from Rs 1,911 crore in the second quarter of 2016-17. Asset quality turned for the better as gross non- performing assets (NPAs) to total advances fell to 3.92 per cent as on September 2017 from 5.96 per cent a year ago. Net NPAs, or bad loans, were 1.61 per cent of net advances in the September quarter, against 2.44 per cent in the second quarter of 2016-17. Its capital adequacy stood at 19.32 per cent at the end of September 2017. The stock closed 0.88 per cent higher at Rs 57.55 on the BSE.
RBL Bank Q2 net up 68% at Rs 150 cr
Private sector lender RBL Bank posted a 68 per cent y-o-y rise in net profit at Rs 150 crore in the second quarter ended September 2017 on improvements in interest margins and other income. Its net interest income rose 39 per cent to Rs 420 crore in Q2 FY18 from Rs 302 crore a year ago. Net interest margin (NIM) improved by 33 bps y-o-y to 3.74 per cent in Q2FY18.
Vishwavir Ahuja, managing director and CEO, said NIM was expected to stay around 3.75 bps. Other income, comprising revenues from treasury operations, fees, commissions, was up 43 per cent at Rs 241 crore in Q2.
The bank’s net advances rose by 35 per cent on a year-on-year basis at Rs 33,576 crore at the end of September 2017 from Rs 24,875 crore a year ago.
The bank’s capital adequacy ratio was 15.95 per cent with Tier-1 capital adequacy ratio was 13.87 per cent at end of September 2017.
NOTE: Kotak Mahindra and associates are predominant shareholders in Business Standard Pvt Ltd