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Kotak Bank net profit up 6.5%

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on Thursday said its consolidated net profit for the quarter ended June 30 expanded 6.5 per cent to Rs 443 crore from Rs 416 crore a year earlier.

Growth in the bank’s standalone profit and rise in investment banking earnings aided the private lender's consolidated financial performance during the three-month period. On a standalone basis, the bank’s profit after tax rose 12 per cent year-on-year to Rs 282 crore in the April-June quarter. Net interest income, or the difference between interest income and interest expense, was at Rs 721 crore, up 27 per cent from a year ago.

Advances grew 31 per cent to Rs 42,318 crore, while deposits increased 34 per cent to Rs 41,632 crore. The low-cost current account and savings account deposits grew 34 per cent to Rs 11,054 crore.

Jaimin Bhatt, group chief financial officer of the bank said savings deposits increased substantially after the bank hiked the interest rate on these deposits in October 2011. The bank currently pays 5.5 per cent interest on savings deposits up to Rs 1 lakh, and six per cent above Rs 1 lakh.

Savings deposits grew 68 per cent to Rs 5,540 crore by the end of June. Deposits and credit are expected to grow at above 20 per cent each in the current financial year, Bhatt said.

The bank closed the quarter with a capital adequacy ratio of 16.6 per cent.

The consolidated net interest margin narrowed 30 basis points to 4.7 per cent for the quarter. The total assets managed by the bank at the end of June were Rs 51,500 crore, compared with Rs 51,700 crore a year ago. Bhatt expects to maintain its margin at the current level.

Kotak Mahindra Capital Company, the investment banking arm, saw a six-fold jump in its net profit to Rs six crore.

Gross non-performing assets (GNPAs) rose to Rs 770.4 crore from Rs 717.4 crore a year ago. In per cent terms, GNPAs declined to 1.34 per cent at the end of June from 1.59 per cent year ago. These NPAs include portfolio bought from other financial sector players.

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