Private lender Kotak Mahindra Bank Ltd.’s third-quarter profit rose as its core income grew.
Kotak Mahindra Bank Ltd.’s profit rose 16% over a year earlier to Rs 1,853 crore in the three months ended December, according to its filing. Analysts polled by Bloomberg had expected a profit of Rs 1,701 crore.
Net interest income, or core income, rose 16.8% year-on-year to Rs 4,007 crore against the estimated Rs 3,497 crore.
Asset Quality
The bank’s gross non-performing asset ratio stood at 2.26% as of December compared with 2.55% in the September quarter.
Proforma gross NPA, including accounts enjoying asset qualification benefit due to the Supreme Court’s interim order in the compound interest case, stood at 3.27%, up from 2.7% in the second quarter.
“Of this increase (in proforma NPA numbers), a disproportionate portion is in unsecured consumer retail which has flown through to +90 days in Q3FY21,” the bank said in its analyst presentation.
Proforma net NPA ratio stood at 1.24% versus 0.74% in the preceding quarter.
The bank approved one-time restructuring for accounts representing 0.28% of its net advances.
Provision coverage, excluding Covid-related provisions, stood at 78.4% as of Dec. 31 compared with 75.6% as of Sept. 30.
Outstanding Covid-related provisions as of Dec. 31 stood at Rs 1,279 crore.
According to Jaimin Bhatt, group president and group chief financial officer, Kotak Mahindra Bank, the recoveries in the proforma accounts have been slow, which is why the bank made higher provisions against these accounts.
