Kotak Mahindra Bank consolidated Q4 net profit up 13.9% at Rs 2,038 crore

Total consolidated income rose 27 per cent year-on-year to Rs 13,823 crore

Private lender Kotak Mahindra Bank reported a 13.9 per cent rise in its March 2019 quarter (Q4) consolidated net profit on account of higher net interest income.

Profit after tax at the consolidated level rose to Rs 2,038 crore in the fourth quarter of financial year 2018-19 from Rs 1,730 crore in the year-ago period (Q4 FY18).

Total consolidated income went up 27 per cent year-on-year (YoY) to Rs 13,823 crore, said the bank in a filing to the stock exchanges on Tuesday.

At the standalone level, the bank reported a 25 per cent rise in net profit to Rs 1,408 crore from Rs 1,124 crore in the year-ago quarter.

For the full year, the bank’s consolidated profit stood at Rs 7,204 crore in FY19, up 16 per cent from Rs 6,201 crore in FY18.

Gross non-performing assets (NPAs), as a percentage of total advances on a consolidated basis, fell to 1.94 per cent for the March quarter, against 1.95 per cent in the year-ago quarter, but was five basis points higher than in the December 2018 quarter.

The bank’s management said that the spike in NPAs came from all the sectors and was not due to any chunky exposure. The bank said that it is still cautious about lending to the real estate sector and would review further lending to auto companies.

The bank’s managing director and CEO Uday Kotak said that the next six months would be challenging for the financial industry. “Overall liquidity has been reasonably tight for a while and this has taken away easy money from the financial sector. There will be a significant challenge for the financial sector as liquidity reduces,” he said.

He added that the challenge is to ensure that the financial sector does not impact the real sector, the way that the real sector has impacted the financial sector for years.

The bank’s net NPA stood at 0.7 per cent for the March quarter, against 0.86 per cent in the year-ago quarter and 0.67 per cent in the December quarter.

Standalone net interest margin (NIM) for the March 2019 quarter stood at 4.48 per cent, against 4.33 per cent in the year-ago quarter. The bank guided towards NIM in the range of 4.2-4.5 per cent for FY20.

Consolidated capital adequacy ratio stood at 17.9 per cent in Q4 from 18.4 per cent a year ago.

Advances, on a standalone basis, as on March 2019, were up by 21.2 per cent to Rs 2.06 trillion against Rs 1.7 trillion as on March 2018. The management said the bank plans to grow its loan book by 20 per cent or more.

Deposits grew 17 per cent from Rs 1.93 trillion in Q4 FY18 to Rs 2.26 trillion in the March 2019 quarter at the standalone level with low-cost current and savings accounts (CASA) deposits at 52.5 per cent from 50.7 per cent a year ago.

With regard to the bank’s case against the central bank regarding promoter shareholding, Kotak said, “As you are aware, the matter is in the courts. We truly believe that we have fully complied with the law of the land, both on paper and in spirit.”  

The bank’s stock closed at Rs 1,387.05 on the BSE, up 0.65 per cent from the previous close.

 

 

Disclosure: Entities controlled by the Kotak family have a significant shareholding in Business Standard