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Kotak Mahindra Bank quarterly net profit jumps 31%

India's Kotak Mahindra Bank reported a 31% increase in net profit on Saturday for the October-December quarter, aided by a strong top line and healthy loan growth.

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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.

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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.

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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%.

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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.

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Sk Sahiluddin
Sk Sahiluddin
Sk Sahiluddin is a seasoned journalist and media professional with a passion for delivering accurate and impactful news coverage to a global audience. As the Editor of The Street Press India, he plays a pivotal role in shaping the editorial direction and ensuring the highest journalistic standards are upheld.
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