Private lender Kotak Mahindra Bank Ltd on Wednesday reported a 64.5 percent surge in net profit in the March quarter to Rs 2,767.4 crore on higher net interest income and writeback of provisions, exceeding estimates by a wide margin.
Net interest income in the quarter jumped 17.6 percent to Rs 4,521 crore. Non-interest income rose 21.4% year on year to Rs 1826 crore. Net interest margin (NIM), a key measure of profitability, stood at 4.78%, up 39 basis points (bps) from last year.
The bank has written back Rs 453 crore in Covid provisions, resulting in a provision and contingency write-back of Rs 306 crore in the fourth quarter. In comparison, it had made provisions of Rs 734 crore in the year ago.
Despite the write-back of some Covid provisions, the bank is holding Covid-related provisions to the tune of Rs 547 crore at the end of March 2022 quarter.
Asset quality has improved sequentially, with the bank reporting gross non-performing assets (NPAs), as a percentage of total advances, of 2.34% in the March quarter, down 91 bps a year ago. Net NPA also improved to 0.64% from 1.21% last year same quarter. In absolute terms, GNPA was down by Rs 956 crore to Rs 6,470 crore, and net NPA was down by Rs 969 crore to Rs 1737 crore in Q4FY22.
Slippages for the quarter stood at Rs 736 crore whereas recoveries and upgrades were to the tune of Rs 897 crore. In accordance with COVID Resolution Framework announced by RBI, the Bank has standard restructured fund-based outstanding of Rs417 crore (0.15% of Advances). Under the MSME Resolution Framework, the Bank has standard restructured fund-based outstanding of Rs 788 crore (0.29% of Advances) as at March 31, 2022.
As far as credit growth is concerned, the bank’s advances grew 21 per cent YoY and 7 per cent sequentially to Rs 2,71 trillion, led by the consumer vertical loans with 21 per cent YoY growth. The home loan and loan against property segment has shown 39 per cent YoY growth. Personal loans, business loans and consumer durable loans shown 40% jump in the quarter.SME and micro finance division showed nearly 25% and 50% jump respectively in the quarter. Customer assets, which include advances and credit substitutes, increased by 22 per cent YoY to Rs 2.92 trillion.
Total deposits were at Rs 3.12 trillion, up 11 per cent YoY. The ratio of current account, savings account deposits stood at 60.7 per cent, 30 bps higher YoY.
The private sector bank’s board has recommended a dividend of Rs 1.1 per share for the financial year ended March.
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