Buttressed by higher net interest income, net profit at the bank headed by Asia’s richest banker climbed to ₹1,854 crore, from ₹1,595 crore in the corresponding period a year ago. Net interest income, or the difference between the interest earned by the bank and that it pays to depositors, expanded 17% to ₹4,007 crore versus ₹3,430 crore, netting a margin of 4.51%.
“At this point, the foot has moved from the break to the accelerator on secured products, some agri products, SME business and some of the corporate businesses,” said Dipak Gupta, joint managing director of the bank. “But on the unsecured retail side, we need to be more cautious and wait before we start pressing the accelerator.”
Provisions and contingencies stood at ₹599 crore, compared with ₹444 crore in the same period last year. Covid-related provisions at the bank amount to ₹1,279 crore.
Asset quality metrics improved at Kotak Mahindra Bank, with gross non-performing loan ratio coming at 2.26% at the end of the December quarter versus 2.46% same period a year ago. It reported a GNPA ratio of 2.55% in the September quarter. Net NPAs of the bank also improved to 0.5% against 0.89% a year ago.
The bank also said if it would have classified the assets which were more than 90 days overdue as NPAs, if not for the Supreme Court’s interim order of standstill on classification of assets, its gross NPAs would have stood at 3.27% and net NPAs at 1.24%. The bank made additional provisions (including interest accrued) of ₹814 crore on such advances including ₹722 crore for this quarter.
“Any account overdue more than 90 days, we have considered it as a problem account and made full provision against it,” said Jaimin Bhatt, group CFO, Kotak Mahindra Bank. “We are seeing the momentum come back; we will be calibrated in where we grow. We are seeing growth come back in pockets in which we are comfortable. We have continued to go slow on unsecured credit and we will wait for another six months for growth to come back in that space.”
The bank has also granted one-time restructuring requests to borrowers on loans worth ₹600 crore, or 0.28% of net advances.
The total advances of the lender declined marginally year-on-year to ₹2.14 lakh crore, although loans expanded 4% sequentially. The bank’s CASA ratio improved to 58.9% and average savings deposits with the bank grew 29% to ₹1.07 trillion at the end of the December quarter.
“We have given a thrust on our home loan business. In this quarter, the mortgage business has grown more than ₹2,000 crore,” Bhatt added. “I don’t think we are seeing any segment that we will stay away from; we just have to closely watch some segments before we start pressing the accelerator.”