Kotak Mahindra Bank Q2 results: Consolidated PAT up 13% to Rs 5,044 crore

Private sector lender Kotak Mahindra Bank on Saturday reported a consolidated profit of Rs 5,044.05 crore for the second quarter of financial year 2025 (Q2FY25), registering a growth of 13 per cent year-on-year (Y-o-Y).

At the consolidated level, return on assets (ROA) for Q2FY25 (annualised) was 2.53 per cent as compared to 2.68 per cent during the same period of the previous financial year, the bank said. Return on Equity (ROE) for Q2FY25 (annualised) was 13.88 per cent as compared to 14.99 per cent.

On a standalone basis, Q2 net profit was Rs 3,343.72 crore, up 5 per cent, Y-o-Y. Net Interest Income (NII) was up 11 per cent to Rs 7,020 crore while net interest margin for the period under review was 4.91 per cent.

Other income or non-interest income went up to Rs 2,684.19 crore from Rs 2,314.53 crore. Fees and services for Q2FY25 increased to Rs 2,312 crore, up 14 per cent Y-o-Y.

“Customer Assets, which comprises Advances and Credit Substitutes, increased by 18 per cent Y-o-Y to Rs 450,064 crore as at September 30, 2024,” the bank said.

Advances increased 17 per cent Y-o-Y to Rs 4.19 trillion as on September 30, 2024 from Rs 3.57 trillion as on September 30, 2023.

Unsecured retail advances (including retail microcredit) as a per cent of net advances stood at 11.3 per cent as on September 30, 2024.

Average total deposits reported a growth of 16 per cent on year to Rs 4.46 trillion. Average current account deposit growth was 6 per cent and savings account deposit growth was 2 per cent Y-o-Y. Term deposits grew by 26 per cent to Rs 2.59 trillion.

The share of current and savings account (Casa) in total deposits increased marginally to 43.6 per cent from 43.4 per cent in the preceding quarter.

“This was the first quarter where we saw the full impact of the tech embargo. Despite that, customer deposits grew over 16% year on year and our Casa ratio stabilised at 43.6 per cent, which is a very nice level,” said Ashok Vaswani, MD & CEO, Kotak Mahindra Bank during the media interaction. “However, our cost of funds went up by 5 bps.”

On the asset side, he said the bank has seen some slowness in rural India, which was reflected in the loan space like commercial vehicles. “We have seen stress in the microfinance industry as well as some over leveraging of customers which is reflected in personal loans and credit cards. But overall in the bank our credit to deposit ratio was at a good 86.4 per cent,” Vaswani said.

As on September 30, 2024, Gross NPA to gross advances was 1.49 per cent as compared to 1.72 per cent a year ago and Net NPA was 0.43 per cent as compared to 0.37 per cent. The bank saw fresh slippages of Rs 1875 crore as compared to Rs 1314 crore in the second quarter of the previous financial year. About 30-40 per cent of the fresh slippages are from credit card portfolio, said Devang Gheewala, group CFO of the bank.

On the proposed acquisition of Standard Chartered Bank’s India Rs 4,100 crore personal loan portfolio that was announced yesterday, Vaswani said, “Apart from scaling personal loan business, this also gives us 95,000 affluent customers with whom we are hoping to establish a much broader relationship.”

The size of the bank’s consumer loan business is Rs 1.92 trillion as on 30 Sep. Personal loan, unsecured business loans and consumer durable loans were Rs 20,868 crore, of which personal loans are about 50 per cent, Gheewala said.

(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd)