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Nirmal Bang Report
Kotak Mahindra Bank Ltd. reported strong set of number for Q4 FY23, with the net profit coming in above our estimate, driven by margin expansion and lower costs.
Balance sheet growth remained strong, with deposit growth at 5.3% QoQ/16.5% YoY while credit growth too was healthy at 2.9% QoQ/17.9% YoY, driven by all the segments.
The high-yielding unsecured credit book witnessed strong growth, supporting margin. Reported net interest margin expanded by 96 basis points YoY to 5.75% (highest ever), leading to net interest income growing by 35% YoY to Rs 61 billion.
Moreover, operating expenditure came in lower and registered a growth of 21% YoY on account of lower employee costs following change in pension annuity rates.
As a result, operating profit registered a strong growth of 39% YoY to Rs 46 billion. Asset quality continued to improve QoQ, with gross delinquencies coming in lower YoY and QoQ, resulting in lower credit cost as provisions declined 148% YoY.
Overall profit after tax increased by 25.2% QoQ/26.3% YoY and the bank reported its highest-ever quarterly annualised return on asset at 3%.
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