<p>Mumbai: Kotak Mahindra Bank on Saturday reported a larger-than-expected 14 per cent drop in quarterly profit as provisions for potential bad loans surged, offsetting solid loan growth.</p><p>The Mumbai-based private lender's standalone net profit - which excludes earnings from its subsidiaries - rose to 35.52 billion rupees in the three months to end-March.</p> .<p>Analysts had expected the bank to report a profit of 36.25 billion rupees, as per LSEG estimates.</p><p>Kotak's provisions and contingencies, or funds set aside for potential bad loans, tripled to 9.09 billion rupees.</p><p>Its gross non-performing assets ratio, a key gauge of asset quality, was 1.42 per cent at the end of March compared with 1.50 per cent at the end of December.</p><p>Kotak's loans rose 13per cent in value terms in the March quarter, while deposits were up 15 per cent.</p> .<p>In February, the Reserve Bank of India (RBI) lifted a 10-month ban on Kotak that barred the lender from issuing credit cards and enrolling clients digitally due to gaps in its IT systems.</p><p>Its net interest income, the difference between what a bank earns on loans and pays out on deposits, rose 5 per cent to 72.84 billion rupees.</p><p>The net interest margin shrank to 4.97 per cent from 5.28 per cent a year earlier, but was higher than 4.93 per cent reported in the previous quarter.</p> .<p>In a falling interest rate scenario, lenders typically pass on central bank rate cuts to borrowers, making loans more attractive, but the pass-through to deposit rates comes with a lag, temporarily compressing margins until the adjustment is fully reflected across both sides of the balance sheet.</p><p>A majority of Kotak's loan book is linked to the external benchmark, putting its margins under pressure.</p><p>Shares of the lender ended 0.9 per cent lower on Friday ahead of the results. </p>
<p>Mumbai: Kotak Mahindra Bank on Saturday reported a larger-than-expected 14 per cent drop in quarterly profit as provisions for potential bad loans surged, offsetting solid loan growth.</p><p>The Mumbai-based private lender's standalone net profit - which excludes earnings from its subsidiaries - rose to 35.52 billion rupees in the three months to end-March.</p> .<p>Analysts had expected the bank to report a profit of 36.25 billion rupees, as per LSEG estimates.</p><p>Kotak's provisions and contingencies, or funds set aside for potential bad loans, tripled to 9.09 billion rupees.</p><p>Its gross non-performing assets ratio, a key gauge of asset quality, was 1.42 per cent at the end of March compared with 1.50 per cent at the end of December.</p><p>Kotak's loans rose 13per cent in value terms in the March quarter, while deposits were up 15 per cent.</p> .<p>In February, the Reserve Bank of India (RBI) lifted a 10-month ban on Kotak that barred the lender from issuing credit cards and enrolling clients digitally due to gaps in its IT systems.</p><p>Its net interest income, the difference between what a bank earns on loans and pays out on deposits, rose 5 per cent to 72.84 billion rupees.</p><p>The net interest margin shrank to 4.97 per cent from 5.28 per cent a year earlier, but was higher than 4.93 per cent reported in the previous quarter.</p> .<p>In a falling interest rate scenario, lenders typically pass on central bank rate cuts to borrowers, making loans more attractive, but the pass-through to deposit rates comes with a lag, temporarily compressing margins until the adjustment is fully reflected across both sides of the balance sheet.</p><p>A majority of Kotak's loan book is linked to the external benchmark, putting its margins under pressure.</p><p>Shares of the lender ended 0.9 per cent lower on Friday ahead of the results. </p>