Private sector lender Kotak Mahindra Bank Ltd. saw a rise in net profit for the April-June quarter, due to higher core income and gains in other non-fund based income.
The bank's standalone net profit for the quarter rose 66.6% year-on-year to Rs 3,452 crore. Analysts polled by Bloomberg estimated a Rs 3,219.5 crore net profit for the period.
Net interest income, or core income, was up 32.7% year-on-year to Rs 6,234 crore from a year ago. Other income more than doubled year-on-year to Rs 2,683 crore, up from Rs 1,116 crore a year ago.
Gross non-performing asset ratio for the bank fell by 1 basis point sequentially to 1.77%. On the other hand, net NPA rose to 0.4% as of June 30 versus 0.37% as of March 31.
The retail unsecured segment and tractor segment contributed to slippages during Q1 FY24, Jaimin Bhatt, group chief financial officer at Kotak Mahindra Bank said, during a media conference call on Saturday.
Provisions for the quarter jumped from Rs 23 crore as of Q1 FY23, to Rs 364 crore in Q1 FY24.
Business Growth
Kotak Mahindra Bank's consolidated net profit for Q1 FY24 stood at Rs 4,150 crore, up 50.6% year-on-year from Rs 2,755 crore in Q1 FY23.
The bank's total advances rose 19% year-on-year to Rs 3.37 lakh crore as of Q1 FY24, up from Rs 2.82 lakh crore over the same period last year. The bank's total deposits also rose 22% year-on-year to Rs 3.86 lakh crore.
"On overall loan growth, the first quarter is typically a softer one. We continue to maintain that we should be targeting anywhere from 1.5 to 2 times the nominal GDP growth of the economy," Bhatt said.
The bank's share of low cost current account and savings account deposits to overall deposits fell to 49% in Q1 FY24 from 58% in Q1 FY23.
While current accounts registered a year-on-year growth of 13.4% to Rs 64,722 crore, fixed rate savings accounts saw a fall in growth by 5.1% to Rs 1.11 lakh crore.
"Asset growth has been relatively high, CASA takes time to come up to that level," Dipak Gupta, joint managing director at Kotak Mahindra Bank, said during the Saturday call. "You will see it inching up again as growth rates stabilise to relatively more average levels."
Term deposits held by Kotak Mahindra Bank jumped by 48.5% year-on-year to Rs 1.96 lakh crore.
Kotak Mahindra Bank's consumer-facing segments such as home loans and loan against property, credit cards, and retail microfinance grew by 18%, 67% and 91% year-on-year, respectively, in Q1 FY24. The bank's corporate loan book registered a year-on-year growth rate of 9%.
On Friday, shares of Kotak Mahindra Bank closed 0.67% up at Rs 1,970 per share, while the Nifty Bank index ended 0.24% down.
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