Kotak Mahindra Bank net soars 153%

Backed by robust growth margin and fee-based income, Kotak Mahindra Bank on Thursday reported a 153 per cent rise in consolidated net profit at Rs 331.4 crore for the quarter ended December 2009 compared to Rs 130.9 crore a year ago.

Consolidated total income for the quarter went up by 42.87 per cent to Rs 2,407.13 crore from Rs 1,684.74 crore in October-December 2008.

The private bank reported an improvement in net interest margin to 6.3 per cent for the December quarter from 5.9 per cent a year ago.
 

RISE AND SHINE PERFORMANCE IN QUARTER ENDED DECEMBER (RS CR)
Kotak Mahindra Bank	2008	2009	% chg
Interest income	1127.31	1184.70	5.09
Other income	557.44	1222.44	119.30
Total income	1684.75	2407.14	42.88
Interest paid	539.00	444.92	-17.45
Operating expenses	845.03	1338.98	58.45
Total expenses	1384.03	1783.89	28.89
Operating profit	300.71	623.25	107.26
Non-tax provisions	97.88	142.28	45.36
Net profit	130.90	331.40	153.17
Gross NPA	865.63	1108.65	28.07
Net NPA	561.41	572.54	1.98
Source : Bank

Other income also grew at a fast clip, partly reflecting the increase in fee-based revenues from corporate clients. For the group, fees and brokerage rose 119.2 per cent to Rs 1,222.43 crore in the quarter-ended December 2009.

What helped the bank’s bottom line was an improved performance by its subsidiaries whose businesses are aligned to the stock markets.

On standalone basis, during the third quarter, Kotak Mahindra Bank’s net profit doubled to Rs 142 crore from Rs 71 crore during October-December 2008.

The net interest income of the standalone entity rose 27 per cent to Rs 487 crore from Rs 383 crore, said Jaimin Bhatt, its group chief financial officer.

Bhatt said the cost of funds declined to around 5 per cent at end of December 2009 from 7-7.5 per cent a year ago. The share of low-cost current account and savings back account deposits in total deposits was estimated at 28 per cent.

The increase in auto, home loans and corporate credit helped to clock 23 per cent growth in consolidated advances to Rs 29,337 crore as against Rs 23,865 crore as on December 31, 2008.

Bhatt said the share of corporate credit has grown to 31 per cent and Kotak Mahindra Bank intended to maintain the share of corporate segment at one third in the total credit book.

Total assets managed or advised by the Kotak Mahindra Group as on December 31, 2009, was Rs 52,610 crore.

On a consolidated basis, the gross non-performing assets (NPAs) were estimated at Rs 1,108.48 crore (3.71 per cent of advances) at end of December 2009, as against Rs 865.63 crore (3.58 per cent) a year ago. In absolute terms, the increase was 28 per cent.

The net NPAs were Rs 572.54 crore (1.95 per cent) compared to Rs 561.41 crore (2.35 per cent). The incremental addition to NPAs had been less and there was improvement in repayment behaviour, Bhatt added.

The consolidated capital adequacy ratio was 20.5 per cent. For the standalone entity it was 17.01 per cent.