MUMBAI, Jan 21 (The Street Press India) – Kotak Mahindra Bank shared some good news on Saturday – their profits went up by 31% in the October-December quarter. This boost came from a strong performance in their earnings and solid growth in loans.
The bank’s net profit hit 27.92 billion rupees ($344.2 million), a significant increase from 21.31 billion in the same period last year. This exceeded the average analyst expectation of 26.28 billion, according to Refinitiv IBES data.
The net interest income, which is the gap between earned and expended interest, jumped by 30.4% from last year to 56.53 billion rupees. Additionally, other income saw an impressive surge of almost 54%. The net interest margin (NIM) stood at 5.47%, a climb from 4.62% the previous year.
The bank anticipates a continued increase in the net interest margin (NIM) in the short term. However, they acknowledge that this upward trend might slow down as borrowing costs gradually rise.
Jaimin Bhatt, the group’s chief financial officer, mentioned during a conference call with reporters, “As we are seeing interest rates picking up, we will see some increase in NIM.”
The bank’s loans increased by over 23%, and deposits saw a nearly 13% year-on-year growth. As of December 31, the current account and savings account (CASA) ratio stood at 53.3%.
To sustain the current rate of credit growth, Indian banks are aiming to bolster their deposit bases. In the fortnight ending December 30, loans from Indian banks surged by almost 15% compared to the previous year, while deposits saw a more moderate increase of 9.2%, as per the latest Reserve Bank of India data.
Kotak Mahindra Bank maintained a positive trend in asset quality, with gross bad loans as a percentage of total loans improving to 1.90% at the end of December from 2.08% at the end of September. Similarly, the net non-performing assets ratio stood at 0.43%, showing improvement from 0.55%.
As of December, the bank’s provision coverage ratio reached 77.6%. Notably, it set aside provisions of 4 billion rupees specifically for Covid-related matters.