Kotak Mahindra Bank net rises 27%

Kotak Mahindra Bank net rises 27%

FILE PHOTO - A man walks past the Kotak Mahindra Bank branch in New Delhi, India, September 6, 2017. REUTERS/Adnan Abidi/File Photo

Private sector lender Kotak Mahindra Bank on Monday reported a 27% growth in its consolidated net profit at Rs 1,789 crore for the quarter ended March over the same period in the previous year on good show by its subsidiaries.

On a stand-alone basis, net profit grew 15% to Rs 1,124 crore for the three months to March.

For the full year, the city based lender's stand-alone profit rose 20% to Rs 4,084 crore over fiscal 2017.

"In the quarter, our consolidated profit after tax has grown 27% and on a stand-alone basis it grew 15% but it is after a one-time hit we have had in the quarter," Uday Kotak, who was redesignated ton Monday as managing director and chief executive officer, told reporters here. He was the vice chairman and managing director earlier.

"There was a change in the gratuity policy on March 29 which has increased the gratuity limits from Rs 10 lakh to Rs 20 lakh. As a result, the bank had to make a provisioning of Rs 82 crore and we took the hit in the fourth quarter. If we adjust for that one-time hit, net would have been also in excess of 20%," he said.

President and chief financial officer Jaimin Bhatt said other than the SME segment, the lender saw growth in all other sectors, including corporates, consumer loans and commercial vehicles, construction equipment, among others.

The stand-alone profit was driven by higher net interest income, other income and also as it had some tax relief.

Net interest income (NII) rose 19% to Rs 2,580 crore during the reporting period.

However, the core net interest margin declined to 4.35% from 4.63%.

Gross non-performing asset (NPA) ratio improved to 2.22% against 2.59%. Similarly, the net NPA ratio also improved to 0.98% from 1.26%. Its SMA 2 outstanding was Rs 72 crore, which is 0.04% of net advances.

Provision in the quarter was Rs 306.91 crore, compared with Rs 267.37 crore in the year-ago quarter. Kotak said he expects provisioning cost to come down further.

Capital adequacy ratio, as per Basel III, was 18.2% as of March 2018 and tier I ratio was at 17.6%.

Advances grew 25% to Rs 169,718 crore over March 2017.

The low-cost CASA ratio stood at 50.8% from 44% from March 2017.

Talking about the current fiscal year, Kotak said, "We see ourselves looking at an opportunity to have a sustained long-term growth. We would guide at 20% plus loan growth for 2018-19."

The bank's scrip ended at Rs 1,210.35, up 1.83% on the BSE which closed at 35,160.36, up 0.55%.

On the recent Nomura report which suggested Kotak Bank could look at Axis Bank for a possible acquisition or merger, Kotak said, "We also read the report. As we have taken a position on this, we don't want to get into any potential rumours or speculation. Our position is that if and when we have something, and we are looking at not only banking but across the financial sector, we would certainly share." 

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