Private sector lender Kotak Mahindra Bank, on Wednesday, posted a 14.8 per cent increase in its net profit for the second quarter of the fiscal, led by stable asset quality and healthy income.
On a standalone basis, the bank’s net profit grew to ₹1,141.65 crore for the quarter ended September 30, 2018, compared to ₹994.31 crore a year ago.
Its total income grew by 22.7 per cent to ₹7,016.17 crore in the second quarter of this fiscal. Net interest income grew 16.2 per cent to ₹2,095 crore in the second quarter of the fiscal from ₹2,313 crore a year ago.
The private sector lender said its net interest margin for the July to September quarter was at 4.2 per cent. Other income rose by 22.7 per cent to ₹1,205.27 core in the second quarter of the fiscal, when compared to ₹953.88 crore in the same period a year ago.
The bank’s gross non-performing assets improved to 2.15 per cent of gross advances as on September 30, 2018, from 2.17 per cent on June 30, 2018, and 2.47 per cent on September 30, 2017.
However, in absolute terms, gross NPAs rose marginally to ₹4,033.07 crore at the end of the second quarter this fiscal, when compared to ₹3,814 crore a year ago.
Net NPAs also eased to 0.81 per cent of net advances as on September 30, 2018, from 1.26 per cent a year ago.
Provisions rose by 63.4 per cent to ₹353.80 crore at the end of the second quarter against ₹216.53 crore a year ago. On a sequential basis, the provisions, however, fell from ₹469.63 crore as on June 30, 2018. “The bank’s capital position continues to be strong with a capital adequacy ratio of 18 per cent,” said Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank.
Exposure to NBFCs
Jaimin Bhatt, Group CFO, said the bank has an exposure of about ₹13,000 crore to NBFCs, of which, close to ₹1,200 crore is in its own subsidiaries.
He added that the bank does not have any exposure to troubled Infrastructure Leasing and Financial Services, but has some marginal exposure to its subsidiary firm.
The lender also said that it has met the RBI’s norms for dilution of promoter holding by the recent allotment of preference shares.
“We are still in discussion with the RBI. From our point of view, we have met the RBI deadline,” said Gupta.
The RBI had mandated the bank to lower the promoter holding to less than 20 per cent by December 2018 and 15 per cent by March 2020.