Kotak Bank net up 39 per cent

BS 200 SCORECARD

Kotak Mahindra Bank today reported a 39 per cent rise in its net profit in the third quarter ended December 31, 2006, on strong credit growth. The profit growth would have been much higher but for the provisioning of acquired bad loans.

The Mumbai-based bank said its net profit rose to Rs 45.40 crore from Rs 32.64 crore a year earlier, after additional provisioning of Rs 6.39 crore on standard assets and accounting provision of Rs 20.36 crore on stressed assets acquired from other banks.

The bank's advances grew by 78 per cent year-on-year to Rs 9,485 crore, while deposits increased by 75 per cent to Rs 9,710 crore. Current account and savings account balances of the bank comprised 18 per cent of total deposits. 
 

Rs crore	Quarter ended Dec
	2005	2006
Interest earned	182.19	357.10
Other income	48.73	95.43
Total income	230.92	452.53
Total expenditure	185.29	343.22
Operating profit	45.63	109.31
Net profit	32.64	45.40
EPS (Rs)	1.06	1.39
CAR (%)	11.05	11.59

Dipak Gupta, executive director, said the bank's net NPAs were 2.3 per cent on account of unresolved bad loans of the acquired banks. Net NPAs from the bank's own lending was just 0.23 per cent.

"The RBI requires banks to make provisions for bad assets acquired, if there are no recoveries. It takes six months just for negotiations with the defaulter and up to 18 months to make recoveries," Gupta said.

The bank's net interest margin was 5.2 per cent at the end of December 2006 against 5.3 per cent a year earlier.

On a consolidated basis, Kotak Bank group's net profit in the third quarter of 2006-07 was up 107 per cent to Rs 169.58 crore from Rs 81.81 crore a year earlier.

The group's total income for the third quarter was Rs 1,190.59 crore, an increase of 82 per cent from a year earlier.