Kotak Mahindra Bank Q1 profit falls 8.5% to Rs 1,244 crore; asset quality declines

Private sector lender Kotak Mahindra Bank on Monday reported a 8.52 per cent year-on-year (YoY) decline in its net profit at Rs 1,244 crore for the first quarter ended June 30, 2020. The lender had posted net profit of Rs 1,360 crore in the same quarter last year, the bank said in a regulatory filing.

The bank's net interest income (NII), the difference between interest earned and interest expended, surged 17.8 per cent YoY to Rs 3,724 crore during Q1FY21 from Rs 3,161 crore in Q1FY20. Net interest margin during the quarter under review stood at 4.4 per cent.

Non-Interest Income (comprising of fee, services and other income) declined by 41.23 per cent to Rs 774 crore during Q1FY21 from Rs 1,317 crore in Q1FY20. Fee income declined to Rs 776 crore from Rs 1,162 crore in the same period last year.

The bank's operating profit for the April-June quarter increased to Rs 2,624 crore from Rs 2,399 crore in Q1FY20.

Provision and contingencies surged three times to Rs 962 crore in April-June quarter of this fiscal as against Rs 317 crore in the same period a year ago.

Also Read: Uday Kotak's shareholding in Kotak Mahindra Bank falls below 26%

The Mumbai-headquartered bank said that it made an additional COVID-19-related general provision of Rs 616 crore in Q1FY21. The coronavirus-related provisions stood at Rs 1,266 crore (0.62 per cent of net advances) as of 30 June, 2020.

On asset quality front, gross non-performing assets (NPAs) ratio as a percentage of gross advances rose to 2.7 per cent from 2.19 per cent in Q1FY20. The net NPA ratio too increased to 0.87 per cent in Q1FY21, against 0.73 per cent in the year-ago quarter.

In absolute terms, the bank's Gross NPA stood at Rs 5,619.33 crore and Net NPA stood at Rs 1,777.10 crore as on June 30, 2020. 

Also Read: Axis Bank Q1 profit slips 19% to Rs 1,112 crore; asset quality improves

Kotak Mahindra Bank's CASA (Current Account and Savings Account) ratio as on June 30, 2021 stood at 56.7 per cent, compared to 50.7 per cent as on June 30, 2020.

Average Savings deposits crossed Rs 1 lakh crore, growing by 34 per cent to Rs 105,673 crore for Q1FY21 compared to Rs 78,654 crore for Q1FY20. Average Current Account deposits grew by 10 per cent to Rs 36,066 crore for Q1FY21 compared to Rs 32,679 crore for Q1FY20.

Capital adequacy ratio of the Bank as per Basel III, as on June 30, 2020 is 21.2 per cent and Tier I ratio is 20.6 per cent. During the quarter, the Bank raised Rs 7,442 crore through a QIP issuanceof 6.5 crore equity shares.

Meanwhile, shares of Kotak Mahindra Bank were trading at Rs 1,324.25 apiece, down 1.90 per cent, against previous closing price of Rs 1,349.90 on the BSE.