Private sector lender Kotak Mahindra Bank has reported a 34 per cent jump in net profit to Rs 260 crore for the second quarter ended September 30, 2011, from Rs 195 crore in the corresponding quarter last year, helped by strong demand for loans and a sharp drop in operating expenses.
“We have had solid advance growth and low non performing assets. We probably have the lowest restructured assets in the banking industry,” said Mr Uday Kotak, Executive Vice-Chairman and Managing Director of the Bank.
The growth in the retail loan book grew at a faster pace than corporate book as there was demand for tractor financing, commercial vehicles and agriculture lending, Mr. Kotak said.
As on September 30, 2011, deposits grew were up 29 per cent to Rs 36,390 crore (Rs 28,287 core) and advances were up by 41 per cent to Rs 37,349 crore (Rs 26,507 crore). The consolidated net interest margin fell to 4.8 per cent during this quarter from 5.2 per cent the previous quarter.
During the first six months of the current fiscal, the bank's net profit rose by 34 per cent to Rs 512 crore from Rs 382 crore in the same period last fiscal.
The consolidated net profit was up 19 per cent to Rs 432.58 crore for the second quarter ended September 30, 2011, from Rs 364.11 crore in the corresponding quarter of 2010. .
The cost of funds went up to over 7 per cent from 6 per cent last year.
Current account and savings account (CASA) deposits comprised 26 per cent of total deposits as on September 30, 2011.
Shares of Kotak Mahindra Bank closed 5.25 per cent higher at Rs 494.85 on the BSE.