Kotak Mahindra Bank net up 47% on loan book growth

Strong growth in advances and other income, and lower provisions helped Kotak Mahindra Bank’s profits rise by 47 per cent to Rs 276 crore, in the quarter ended December 31, 2011, from Rs 188 crore in the corresponding quarter last year.

The growth in advances has come mainly from segments like corporate, commercial vehicles, construction equipment and mortgages.

“There is no slowdown in the segments that we are present in. We have a large share of retail loans and short term working capital loans in the corporate segment. The slowdown is in longer term loans like infrastructure loans and capex loans. There is still strong demand for credit outside the main metro cities,’’ said Mr Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank.

In the corporate segment the bulk of the loans are those that have up to one year maturity period.

However, in the December ended quarter, corporate loans grew at faster pace than consumer and commercial. The share of corporate loans to total loans increased from less than 30 per cent to 35 per cent, while the share of consumer loans was stable at 38 per cent.

As on end December, restructured assets declined to Rs 63 crore, from Rs 114 crore last year. This led to a decrease in provisions to Rs 31 crore (Rs 43 crore).

Net Interest Margin declined from the year-ago period, though it was flat when compared to the September quarter. This was due to increase in cost of funds on account of higher outgo on savings bank deposits. Following de-regulation of interest rates, SB deposits saw a growth of Rs 900 crore during the December quarter.

SB accounts grew to Rs 4,400 crore, against Rs 3,200 crore in the year-ago period.

Current accounts grew to Rs 6200 crore (Rs 4,600 crore).

“We have not found the need to grow Certificates of Deposit because of the growth in CASA,’’ said Mr Jamin Bhatt, President and Group Chief Financial Officer, Kotak Mahindra Bank.

Consolidated profit

On a consolidated basis the net profit was Rs 463 crore, up 21 per cent from Rs 384 crore last year.

Shares of the bank closed at Rs 477.45, down 3.28 per cent, on the BSE, on Monday.