Kotak Mahindra's consolidated net profit up 16%

On a stand-alone basis, the private lender's profit after tax during the quarter grew 26% to Rs 353 cr

Kotak Mahindra Bank said on Thursday its consolidated net profit for the quarter ended September 30, 2013 increased to Rs 583 crore, up 16 per cent from the year-ago period, aided by strong performance of its banking, asset management and car finance businesses.

On a stand-alone basis, the private lender's profit after tax during the quarter grew 26 per cent to Rs 353 crore, driven by higher interest income and improvement in net interest margin.

Net interest income - the difference between interest income and interest expense - was at Rs 924 crore during the three-month period, up 22 per cent year-on-year (y-o-y). Net interest margin improved 30 basis points, y-o-y, at 4.9 per cent.

The gross non-performing asset ratio of the bank, on a stand-alone basis, increased by 36 basis points from a year earlier to 1.97 per cent, while the net bad loan ratio deteriorated by 21 basis points, y-o-y, to 0.96 per cent at the end of the quarter. Standard restructured loans were 0.09 per cent of net advances.

Advances increased by 11 per cent from a year earlier to Rs 50,609 crore. "The bank is cautiously slowing down on CECV (commercial equipment and commercial vehicle) lending. Without considering CECV, the growth in advances was 18 per cent y-o-y," the bank said in a statement.

The private lender's savings deposits grew by 42 per cent, leading to a current account savings account (Casa) ratio of 29 per cent at the end of September 2013. The bank had 502 branches and 1,004 ATMs at the end of the quarter.

Kotak Mahindra Bank said it has not transferred any statutory liquidity ratio (SLR) security from available for sale (AFS) or held for trading (HFT) category to held-to-maturity (HTM) category. At the end of the quarter, the bank's total HTM securities were 11.4 per cent of NDTL (net demand and time liability).

In August, the Reserve Bank of India (RBI), as a one-time measure, had permitted banks to transfer SLR securities from AFS or HFT category to HTM category at valuation rates prevailing on July 15, 2013.

“As permitted under the same circular, the bank has opted to distribute the net depreciation on the AFS and HFT portfolios in equal instalments during FY14. Accordingly, of the net depreciation of Rs 264 crore as on September 30, 2013, the bank has recognised depreciation of Rs 88 crore till September 30, 2013," said the private lender.

If the bank had transferred all SLR securities from AFS or HFT category to HTM category, the net depreciation would have been Rs 47 crore before considering distribution during the financial year.

The bank closed the quarter with a capital adequacy ratio of 19.4 per cent.

Among other businesses, Kotak Mahindra AMC and Trustee reversed its losses and reported a profit of Rs 17 crore during July-September period. Kotak Mahindra Prime's profit during this period was Rs 125 crore compared to Rs 114 crore a year earlier.