A stake sale in its general insurance subsidiary has boosted the standalone net income of the fourth largest private sector lender Kotak Mahindra Bank by 81 percent to Rs 6,250 crore. Of this, as much as Rs 3,012 crore came in as one-time income from a deal with Zurich Insurance group that picked up 70 percent in the company during the June quarter. In the April-June quarter of the last fiscal, the bank had booked only Rs 3,452 crore profit.
That means keeping the insurance stake aside, consolidating the net profit stood at Rs 4,435 crore, the bank said Saturday.
The net interest income of the lender was Rs 6,842 crore, 10 percent more than the Rs 6,234 crore it had in the same period last fiscal.
In fact, none of the numbers met the street expectations as the bank’s business was badly hit by the Reserve Bank ban on digital and mobile banking channels from the middle of April for not meeting KYC requirements and also for not fully securing customer data from a technical angle.
"The RBI ban on digital and mobile banking channels had quite an impact on financials with temporary disruption on digital journeys, 811 business and credit cards," the management told reporters at the earnings call Saturday. They also claimed that they “have made significant progress during the quarter with respect to IT infrastructure” but didn’t share any details. They also said in consultation with the RBI, they have put together a plan in place with Accenture and Infosys for the tech upgrade.
“We have also started the the RBI mandated external audit and have appointed GT Bharat as external auditors in consultation with the regulator. The scope of the audit has also been finalised with the RBI," they said.
The net interest margin was flat at 5.02 percent for the reporting quarter.
The lender’s gross non-performing assets stood at 1.39 percent, down from 1.77 percent a year ago and the net NPAs inched down to 0.35 percent from 0.44 percent last year.
Advances grew 20 percent to Rs 4.05 trillion from Rs 3.37 trillion. Unsecured retail advances of the bank (including retail microcredit) as a percent of net advances stood at 11.6 percent.
Total deposits grew to Rs 4.35 trillion up 21 percent over the year-ago period. Of this, the low cost Casa deposits grew 3 percent to Rs 1.94 trillion.
The management said the NIM was impacted because credit card issuances were halted after the RBI ban.
They also admitted to spotting some delinquencies in the microfinance space in three northern states and have since tightened credit and disbursement norms.
As the online channel is frozen, the bank has decided to open around 200 branches during this fiscal which will involve Rs 50-70 lakh per branch on an average.
