The Uday Kotak-led private sector lender Kotak Mahindra Bank on May 13 reported standalone profit of Rs 1,266.6 crore for the quarter ended March 2020, registering a 10 percent fall due to a signinficant jump in COVID-19 related provisions.
The standalone profit stood at Rs 1,407.80 crore in corresponding period last fiscal.
Provisions and contingencies shot up 6-fold to Rs 1,047.47 crore in Q4FY20 against Rs 171.26 crore in same period last year, while the sequential rise was 135.9 percent.
“General provision for COVID-19 stood at Rs 650 crore, while the provision towards advances / others (including provisions for exposures to entities with unhedged foreign currency exposures) was Rs 373.72 crore, and provision / (write-back of provisions) for mark-to-market depreciation on investments in AFS and HFT categories Rs 23.68 crore,” Kotak Bank explained the break-up of provisions for the quarter.
Net interest income, the difference between interest earned and expended, grew by 17.2 percent year-on-year to Rs 3,559.65 crore for March quarter, with net interest margin improving 26 basis points YoY to 4.72 percent in Q4.
The bank said advances were up 7 percent to Rs 2,19,748 crore in March quarter 2020, while total deposits grew 16 percent YoY to Rs 2,62,821 crore with savings deposit crossing Rs 1 lakh crore mark in Q4FY20.
Asset quality improved during the quarter with gross non-performing assets (NPA) falling 21 basis points sequentially to 2.25 percent and net NPA declining 18 basis points QoQ to 0.71 percent.
As on March 2020, SMA2 outstanding was Rs 96 crore (0.04 percent of net advances), said the bank.
Non-interest income grew by 16.2 percent to Rs 1,489.4 crore compared to March quarter of previous year, while pre-provision operating profit increased 19.4 percent to Rs 2,725.28 crore YoY in Q4FY20.
The standalone profit in financial year 2019-20 surged 22.2 percent to Rs 5,947.2 crore and net interest income rose 20.5 percent to Rs 13,499.66 crore compared to previous year, said the bank in its BSE filing.
Kotak Bank’s consolidated Q4 profit declined 6.5 percent year-on-year to Rs 1,905.18 crore, but full year net jumped 19.3 percent to Rs 8,593.36 crore compared to previous year.
Among major subsidiaries, profit of Kotak Securities in Q4FY20 grew by 46.8 percent year-on-year to Rs 163 crore, Kotak Mahindra Life Insurance showed 19.6 percent growth at Rs 165 crore and Kotak AMC & TC business reported a 17.3 percent rise in profit at Rs 88 crore, but Kotak Mahindra Prime’s net declined 1.8 percent to Rs 161 crore in March quarter.
Last month, the bank received board approval for raising capital by issue of up to 6.5 crore equity shares through a private placement, follow-on public offering, qualified institutions placement or a combination thereof.
Meanwhile, the global rating agency S&P in April had reaffirmed its rating outlook on Kotak Mahindra Bank at BBB- /A-3 with a stable outlook.
The stock corrected 23 percent during the March quarter and fell 29 percent year-to-date, while in last one year, it was down 14 percent.
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