MUMBAI: Private sector lender Kotak Mahindra Bank has reported a 2.7 percent on-year fall in its standalone net income at Rs 3,253 crore in the September quarter.
However, its key net interest income (NII) grew and witnessed a healthier 16 per cent jump in net advances, but only to be whittled down by a massive 43.5 per cent spike in provisions.
The Bank said Saturday that its provisions for bad loans and fresh slippages soared 43.5 percent to Rs 947 crore from a low of Rs 660 crore a year ago, while fresh slippages jumped to Rs 1,629 crore from Rs 1,812 crore, but recoveries and upgrades were lower at Rs 688 crore.
The key profitability metric, net interest margin, contracted to 4.54 per cent from 4.65 per cent, the bank said Saturday in an exchange filing.
Similarly, it said the cost of funds stood at 4.70 percent and did not offer the comparative number.
More importantly, despite an improvement in NPAs, the bank saw its fresh slippages spooking the overall numbers during the quarter, jumping to Rs 1,629 crore from Rs 1,812 crore while recoveries and upgrades were Rs 688 crore in the second quarter, up 25 percent on-quarter.
This had the overall provisions soaring by 43.5 per cent to Rs 947 crore from a low of Rs 660 crore a year. Gross NPAs improved to 1.39 per cent from 1.49 per cent, and net NPAs also inched down to 0.32 per cent from 0.43 per cent in September 2024. The provision coverage ratio stood at 77 per cent.
Overall advances grew much faster than the industry at 16 per cent and deposits at 14 per cent. Among loan products, the credit card portfolio declined 14 per cent on-year to Rs 12,444 crore.
Retail microcredit too dipped 41 per cent from a year ago to Rs 5,725 crore—both these segments have been the biggest pain-points for the bank for a few quarters now, and also for a few others like RBL and Axis Bank.
The home loans and loans against property business rose 18 per cent on-year to Rs 1.38 trillion, corporate loans also rose 18 per cent to Rs 1.09 trillion, and business banking assets rose 20 per cent to Rs 47,825 crore, taking the net advances up 16 per cent to Rs 4,62,688 crore.
Average total deposits grew to Rs 5,10,538 crore, up 14 per cent and average current deposits grew to Rs 70,220 crore, up 14 per cent, while the average fixed rate savings deposits grew 8 per cent to Rs 1,13,894 crore.
The average term deposits jumped 20 per cent to Rs 3,11,889 crore, the bank said, adding of the total deposits, the low-cost Casa ratio stood at 42.3, helping the credit to deposit ratio to print at 87.5per cent.
Standalone return on assets was 1.88 per cent and the return on equity stood at 10.38 per cent.
The capital adequacy ratio, under the Basel III norms, stood at 22.1 per cent and the core equity tier 1 ratio stood at 20.9 per cent.
