Mumbai: Kotak Mahindra Bank’s standalone net profit increased 15 per cent in the quarter ended December 2021 led by brisk loan growth from the retail segment and also helped by better asset quality which resulted in a write back in provisions during the quarter.
Net profit increased to Rs 2,131 crore, up from Rs 1,854 crore a year ago largely due to 18 per cent growth in advances on the back of a brisk 29 per cent growth in retail loans.
Group chief financial officer Jaimin Bhatt said the bank saw a all round growth in customer assets led by a 38 per cent growth in home loans, 27 per cent growth in loan against property and double digit growth in unsecured loans like credit cards, personal loans and also agriculture linked loans.
“The push for growth has led to an increase in promotional, business related and technology expenses during the quarter,” Bhatt said adding that the bank will continue to go for growth for the rest of the fiscal.
Bank expenses increased 10 per cent to Rs 5559 crore in the quarter ended December 2021 from Rs 5042 crore a year earlier.
On a consolidated basis net profit increased 31 per cent to Rs 3,403 crore, from Rs 2,602 crore a year ago. The bank contributed 63 per cent of the group’s profit. All six subsidairies of the bank reported a year on year increase in net profit.
The strong growth in loans pulled up net interest income (NII) by 12 per cent to Rs 4,334 crore, from Rs 3,876 crore a year earlier. Other income growth was muted at just 6 per cent to Rs 1364 crore from Rs 1290 crore a year ago mainly because of the Rs 484 crore hit the bank took on mark to market losses on some of its bond investments. About 62 per cent of the bank’s investments have to be marked to their market value.
An improvement in asset quality helped by higher recoveries and lower slippages helped the bank write back provisions. Net NPAs dropped to 0.79 per cent of net advances from 1.24 per cent a year ago due to Rs 1086 crore of recovery and upgrades during the quarter. The bank wrote back provisions of Rs 132 crore during the quarter largely due to the Rs 279 crore Covid linked provisions it chose to recoup.
Bhatt said lower slippages and NPAs have made the bank confident that they have enough provisions despite the write back. The bank still carries Rs 1000 crore of Covid related provisions.
Total provisions held as on December 31, 2021 was at Rs 7,269 crore.
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