Kotak Mahindra Bank on Monday reported a 33% year-on-year (y-o-y) jump in its net profit to Rs 1,682 crore for the quarter ended March mainly because of larger net interest earnings (NII). The bank was capable to register development in the bottom line in spite of a 181% quarter-on-quarter (q-o-q) and 13% y-o-y jump in provisions to Rs 1,179 crore. The operating profit elevated 25% y-o-y to Rs 3,407 crore as the net interest earnings (NII) grew 8% y-o-y to Rs 3,843 crore.
Uday Kotak, MD and CEO, mentioned, “I hope the Covid-19 situation is short lived and it will be like the UK, where it sharply went up and then came down sharply too.” The bank has decided to curtail deployment of staff in non-crucial activities, which includes physical collections for a week at least, due to Covid-19 predicament. “Yes, it is a risk that the bank is taking for short term but people balance sheet is more important to us,” Kotak mentioned.
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The net interest margins (NIM) declined 33 basis point (bps) y-o-y and 12 bps sequentially to 4.39%.
The asset excellent enhanced throughout the March quarter. Gross non-performing assets (NPAs) ratio enhanced 2 bps to 3.25%, compared to reported proforma gross NPAs of 3.27% in the earlier quarter. Similarly, net NPAs ratio enhanced 3 bps to 1.21% from 1.24% in the December quarter. Lenders had reported NPAs on a proforma basis throughout the December quarter due to a standstill from apex court on declaring NPAs.
Fee and service earnings grew 23% q-o-q and 9% y-o-y to Rs 1,378 crore. Overall, other earnings grew 31% y-o-y to Rs 1,949 crore.
Advances grew 4.5% q-o-q and 1.8% y-o-y to Rs 2.23 lakh crore. The lender has registered a 10% y-o-y development in home loan. The bank does not strategy to raise home loan prices as of now. It continues to be conservative in unsecured retail business enterprise.
Deposits grew 6% y-o-y as nicely as sequentially to Rs 2.8 lakh crore. Current account savings account (CASA) ratio as on March 31, 2021 stood at 60.4%, compared to 56.2% in the March quarter last year.
The capital adequacy ratio (Vehicle) stood at 22.3% with CET1 ratio of 21.4% at the finish of March 2021.
The board has suggested dividend of Rs .9 per equity share for the year ended March 31, 2021, topic to approval of shareholders.