Private Sector Lender Kotak Mahindra Bank announced its financial performance for the second quarter of the current financial year on Tuesday, October 26. The bank reported a 7 percent year-on-year fall in standalone profits at Rs.2,032 crore in the quarter ending September 30 as compared to the profit of Rs.2,184 crore it posted during the corresponding quarter last year.
However, the bank’s standalone profits grew by 24 percent on a quarter-on-quarter basis. The bank had recorded a profit of Rs.1,642 crore in the quarter ending June 2021.
In a regulatory filing presented before the BSE, the lender revealed that its Net Interest Income (NII) grew by 3.2 percent during the Q2FY22, standing at Rs.4,020.6 crore from Rs 3,897 crore in the same quarter last year. Moreover, the Net Interest Margin declined 5 base points to 4.45 percent in the quarter under review.
The bank’s Gross Non-Performing Assets (GNPA) ratio saw improvement, standing at 3.19 percent in the September quarter, a decrease from the 3.56 percent it posted in the June quarter. But it is higher than 2.70 percent (Pro-forma) reported in the corresponding quarter last year. Meanwhile, the Net Non-Performing Assets declined 20 base points to 1.1 percent on a quarter-on-quarter basis.
Kotak Mahindra Bank also disclosed in the regulatory filing that the total provisions, including specific, standard, COVID-19 related provisions, stood at Rs 7,637 crore, close to 100 per cent of gross NPAs. It includes Rs 1,279 crore in COVID-19 provisions, which were not used during the first half of the current financial year. Its provision coverage ratio stood at 67 per cent as of September 30.
The lender’s Non-interest income (other income) also rose significantly to Rs. 1812.6 crores in the quarter under review. The rise in other income was largely driven by the bank’s fee and services business including distribution and syndication income, and general banking fees.
Announcing the financial performance of its subsidiaries during the Q2FY22, the bank revealed that Kotak Securities posted a profit of Rs.243 crore, a surge of 22.1 percent YoY. Kotak Mahindra Prime reported a growth of over 80 percent in profits during the September quarter, standing at Rs.240 crore.
Following the announcement, Kotak Mahindra Bank’s stock was trading high on the BSE, up 2.48 percent and closing at Rs. 2,210.55.