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Saturday, October 26, 2013

Kotak Bank Q2 net rises 26% on improved margins

Higher margins and stable interest income helped Kotak Mahindra Bank post 26 per cent rise in standalone net profit at Rs 353 crore in the July-September quarter of fiscal 2013-14.

The mid-sized private sector lender reported a net profit of Rs 280 crore in the year-ago period.

During the quarter, the net interest margin improved to 4.9 per cent (4.6 per cent in Q2 FY13) due to capital infusion in Q1 and reduction in proportion of investments.

Net interest income (the difference between interest earned and expended) grew 22 per cent to Rs 924 crore. Other income grew 18 per cent to Rs 297 crore from Rs 251 crore in Q2 FY13.

Gross NPA ratio as on September 30, 2013, increased to 1.97 per cent from 1.61 per cent in the year-ago period.

“The deterioration in asset quality was largely due to the commercial equipment and commercial vehicle segment. We cautiously slowed down in this segment. The delinquency in this segment is reducing and it seems to be stabilising,” said Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank.

“As a matter of principle, we did not transfer any government security to the held-to-maturity category and decided to amortise the mark-to-market loss (worth Rs 264 crore) on held-for-trading/available-for-sale portfolio equally over three quarters, beginning the July-September quarter,” Gupta said.

On a consolidated basis, the bank’s net profit increased 16 per cent to Rs 583 crore (Rs 502 crore in Q2 FY13). This included profits made by Kotak Mahindra Prime (up 10 per cent y-o-y at Rs 125 crore), Kotak Securities (flat at Rs 40 crore), Kotak Life Insurance (a tad lower at Rs 44 crore from Rs 47 crore).

Source: thehindubusinessline


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