Kotak Mahindra Bank on Saturday posted a 13 per cent growth in September quarter profit to Rs 5,044 crore, helped by performance of its subsidiaries.
The core net interest income grew 11 per cent at Rs 7,020 crore for the bank on the back of a 17 per cent growth in advances and a 0.31 per cent narrowing in the net interest margin at 4.91 per cent
Kotak Mahindra Bank on Saturday posted a 13 per cent growth in September quarter profit to Rs 5,044 crore, helped by performance of its subsidiaries.
On a standalone basis, the private sector lender's net profit for the quarter grew 5 per cent to Rs 3,344 crore, limited by a jump in provisions.
The core net interest income grew 11 per cent at Rs 7,020 crore for the bank on the back of a 17 per cent growth in advances and a 0.31 per cent narrowing in the net interest margin at 4.91 per cent.
The bank's chief executive and managing director, Ashok Vaswani, said reverses in unsecured loans such as personal loans and credit cards and the embargo imposed by the Reserve Bank of India, making it difficult to add more new customers, impacted the margins.
A senior bank official said nearly 40 per cent of the fresh slippages of Rs 1,875 crore came from the unsecured segment.
The other income rose 16 per cent to Rs 2,684 crore for the bank, with the core fees and services' revenue up 14 per cent to Rs 2,312 crore.
The overall provisions for advances were up 83 per cent at Rs 669 crore for the quarter, up from Rs 366 crore, and were attributed to the jump in stress on the credit card book.
Vaswani said it has undertaken efforts to tighten underwriting for credit cards, but added that it will still look to grow the unsecured assets in the mid-teens.
In line with peers, the bank is also experiencing elevated stress on the microlending book, he said, adding that there is softness in credit demand from rural geographies generally, which has slowed down commercial vehicle and tractor loans.
The stress on the microfinance book is expected to last another 3-6 months at least, a bank official said.
On the asset quality front, the gross non-performing assets ratio improved to 1.49 per cent from the 1.72 per cent in the year-ago period.
Deposit growth came at 16 per cent, and the bank's credit deposit ratio stood at 86 per cent. Vaswani expressed satisfaction with the CD ratio, saying it has always been in the 83-87 per cent range.
Vaswani said the overall impact of the April 2024 embargo on the bank has been in line with expectations, but refrained from giving any expectations on when the same will be lifted.
He said the bank is working closely with its external auditor GT Bharat to attain all regulatory asks. Despite the curbs in online banking, it was able to open 8 lakh new customer accounts, he said.
Acquisition of the Rs 4,100-crore personal loan book from Standard Chartered will get the bank access to over 90,000 affluent customers, and also widen the NIMs, the management said.
Its overall capital adequacy stood at 22.6 per cent with the core buffer at 21.5 per cent.
Among the subsidiaries, its in-house non-bank lender Kotak Mahindra Prime's net profit grew 29 per cent to Rs 269 crore, the brokerage had its profit jump 37 per cent to Rs 444 crore.
The lender's asset management arm delivered a 60 per cent growth at Rs 197 crore and Kotak Mahindra Capital saw its net profit rising 226 per cent to Rs 90 crore.