Kotak Mahindra Bank profit surges

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Kotak Mahindra Bank posted a 15.5 per cent rise in consolidated profit before tax (PBT) at Rs 2,944.71 crore for the quarter ended September 30, 2019 (Q2FY20), from Rs 2,549.91 crore in the year-ago quarter.

Its net profit jumped 38 per cent to Rs 2,407.25 crore in Q2FY20, as against Rs 1,747.37 crore a year ago, on account of higher net interest income (NII), which is the difference between interest earned and interest expended. Total consolidated income was up 15.8 per cent year on year (YoY) to Rs 12,543 crore.

On a standalone level, which represents the banking operations, PBT at Rs 2,100.63 crore was up 20.6 per cent YoY, while net profit was up 51 per cent YoY to Rs 1,724.48 crore.

The bank’s NII grew 25 per cent to Rs 3,350 crore in Q2FY20, as against Rs 2,676 crore in the year-ago quarter. Net interest margin (NIM), a measure of profitability of banks, stood at 4.61 per cent compared to 4.19 per cent a year ago. Margins were helped by an increase in the share of low-cost current account and savings account (CASA) to 53.6 per cent in Q2, from 50.2 per cent in September 2018 quarter.

On the asset quality front, the gross non-performing assets (NPAs), on standalone basis, for Q2FY20 rose to 2.32 per cent from 2.15 per cent in the year-ago quarter. Gross NPAs rose on sequential basis, too, from 2.19 per cent in June 2019 quarter.

The net NPA stood at 0.85 per cent, up from 0.81 per cent a year ago and 0.73 per cent in June 2019 quarter. The provision coverage ratio (PCR) of the bank, excluding the technical write-offs, was at 64 per cent in Q2FY20. Total advances, on a standalone basis, grew 15 per cent to Rs 2.13 trillion while deposits grew 13 per cent to Rs 2.33 trillion, YoY. The capital adequacy ratio, on standalone basis, as of September 2019, stood at 18.2 per cent with Tier 1 Capital at 17.6 per cent.
Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd

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