Private sector lender Kotak Mahindra Bank today reported 33 per cent growth in March quarter net at Rs 1,404.34 crore on healthy asset growth in small-ticket loans and consequent widening of margins.
Private sector lender Kotak Mahindra Bank today reported 33 per cent growth in March quarter net at Rs 1,404.34 crore on healthy asset growth in small-ticket loans and consequent widening of margins.
The fourth largest private sector lender's standalone net rose 40 per cent to Rs 976 crore. For the fiscal 2017, consolidated net rose 43 per cent to Rs 4,940.43 crore.
Net interest income jumped 16 per cent to Rs 2,161 crore in the reporting quarter, while non-interest income rose to Rs 1,002.65 crore from Rs 681.91 crore.
The bank management attributed the spike in other income to a jump in core fees and commissions, and also healthy recoveries on the distressed loans that it buys.
The bank registered a 37 per cent increase in advances to Rs 1.36 trillion, driven largely driven by the high margin small ticket loans while corporate loans contracted during the reporting period.
Loans to commercial vehicles and construction equipment rose 37 per cent, agriculture 14 per cent, business banking was up 7.55 per cent, home loans inched up 4.29 per cent, while small business loans grew 10.15 per cent.
Share of the low-cost current and saving account advances -- which moved up due to note ban -- also improved to 41 per cent. Consequently, net interest margin moved to a system high of 4.6 per cent from 4.4 per cent.
There was an increase in the gross non-performing assets ratio to 2.59 per cent from 2.40 per cent, but vice-chairman and managing director Uday Kotak attributed it in full to recognition of ING Vysya Bank's dud assets.
He also said at present, bad assets from ING Vysya Bank -- which was merged into Kotak Bank in April 2015 -- account for over 75 per cent of the overall Rs 3,578 crore of NPAs, which was Rs 2,838 crore a year ago.
Accordingly, overall provisions moved up to Rs 267.37 crore from Rs 200 crore a year ago, with Kotak saying credit cost for the current fiscal year will come lower than 0.61 per cent in fiscal 2017.
He said going forward the focus will be on the resolution side and expected some improvements in it with the improvement in the economy.
Joint managing director Dipak Gupta said the market for resolutions is much better than what it was two-three quarters back.
Kotak said the bank's shareholders will be meeting on May 9 to consider a Rs 5,000-crore capital raising proposal, which along with some other announcements, should help get his family holdings in the bank down to the mandated levels.
"We are scouting lots of opportunities and looking at many inorganic options. We hope things develop sooner rather than later," he said.
Last month, on the eve of the board meet to discuss capital raising, Kotak had confirmed the bank's intention to grow inorganically and also look at the emerging opportunities in the distressed asset space.
The amendment to increase the cash component in distressed asset sales to 50 per cent from 15 per cent will help revive the market which has witnessed sagging interest till now, Uday Kotak said.
The Kotak scrip closed 1.58 per cent up at Rs 914.55 on the BSE as against a 0.34 per cent correction in the benchmark.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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