Kotak Mahindra Bank today reported 8% year-on-year growth in net profit for the quarter ended December 31, 2023 to Rs 3,005 crore, due to provisioning towards alternative investment funds and loss in the fixed income book.
During the same quarter in the previous year, the bank reported net profit of Rs 2,792 crore.
“This quarter we had two difficult hits in the bank stand alone,” said Jaimin Bhatt president and group CFO Kotak Mahindra Bank.
First, the bank made a provision of Rs 190 crore for investments into the Alternate Investment Fund (AIF) having downstream exposure to debtor companies. Bank’s funded outstanding to such companies was Rs 65 crore as of December 31, 2023. This is in line with the RBI circular which came out in December last year, said Bhatt.
Second hit was on account of trading book where the bank took a hit in the fixed income book of Rs 168 crores in the quarter.
Net interest income, which is the difference between interest earned and interest expended, rose nearly 16% YoY to Rs 6,553 crore.
On the asset quality front, the gross non-performing assets as a percentage of total loans was 1.73% as of December end compared to 1.90% a year ago, and 1.72% a quarter ago. Recoveries and upgrades during the quarter was Rs 830 crore. The bank has seen an increase in slippages to Rs 1,177 crore against Rs 748 crore.
The net non-performing assets ratio was 0.34% as of December end, compared to 0.43% a year ago.
Net interest margin (NIM) for the quarter was 5.22%, flat sequentially but lower than 5.47% a year ago.
Speaking to the media for the first time after taking over Ashok Vaswani MD and CEO of Kotak Mahindra Bank said that the focus will be go grow scale for relevance. “Kotak is a very strong brand has a very strong reputation. It is very well capitalized and an incredible platform offering the full array of financial services, products and services. As I see it, the challenge of the story from here is how we scale and scale not just for the size of scale, but scale for relevance.”
Total advances were at Rs 3.72 lakh crore as of December end, 19% higher from the last year driven by growth in retail micro finance and credit cards. Credit cards grew 52% while retail micro finance grew 59%.
The bank management called deposits to be a challenge as CASA ratio at December end stood at 47.7%. Average current deposits grew to Rs 59,337 crore from Rs 56,372 crore a year ago. Average savings deposits grew to Rs 1.23 lakh crore from Rs 1.18 lakh crore a year ago.
The capital adequacy ratio of the bank, as per Basel III, was 21.2% as of December end.
Today, the board also approved plans to raise funds by way of issuance of Unsecured, Redeemable, Non-Convertible Debentures, on a private placement basis, for an amount up to Rs. 10,000 crore, in one or more tranches / series, during FY 2024-25, subject to the approval of the members of the Bank and any other approvals as may be necessary. Also, the board approved re-appointment of Uday Shankar on the board as independent director for a period of three years until March 2027.
For the nine months ended December, bank’s net profit rose 30% to Rs 9,648 crore.
Shares of the bank closed 2.3% up on the Bombay Stock Exchange to Rs 1,806 when the broader index fell 0.36%
