Kotak Mahindra Bank Q4 profit jumps 65% on wider margin, provision writeback

Kotak Mahindra Bank has reported a 65% increase in standalone net profit for the fourth quarter, helped by a writeback of provisions it had made earlier for possible bad loans.

Profit after tax for the quarter ended March 31 increased to Rs 2,767 crore from Rs 1,682 crore a year earlier.

Net Interest Income (NII) for the fourth quarter increased 18% to Rs 4,521 crore from Rs 3,843 crore a year earlier. Net Interest Margin (NIM) expanded to 4.78%, compared with 4.39% a year earlier.

The bank wrote back Rs 306 crore of provisions in the fourth quarter. It had made a provision of Rs 734 crore a year earlier.

Other key highlights

1) Operating profit for Q4 was Rs 3,340 crore, up 13% from Rs 2,962 crore a year earlier.

2) Profit after tax for FY22 increased 23% to Rs 8,573 crore from Rs 6,965 crore in FY21.

3) NII for FY22 increased 10% to Rs 16,818 crore from Rs 15,340 crore in FY21.

3) Advances increased by 21% to Rs 2,71,254 crore as at March 31, 2022 from Rs 223,670 crore as at March 31, 2021.

4) CASA ratio as at March 31, 2022 stood at 60.7%, up from 59.9% three months before.

5) Average current deposits grew to Rs 49,776 crore for FY22 from Rs 39,481 crore for FY21, up 26%.

6) Average Fixed Rate Savings deposits rose 11% to Rs 110,988 crore as at March 31, 2022.

7) Consolidated net profit for Q4 was Rs 3,892 crore, up 50% from Rs 2,589 crore in Q4 FY21.

8) Consolidated net profit for FY22 increased 21% to Rs 12,089 crore from Rs 9,990 crore in FY21.

9) Total provisions held as on March 31, 2022 was at Rs 6,710 crore.

10) Capital adequacy ratio was 22.7% and Tier I ratio was 21.7% at the end of March.

Asset quality improves

The bank said it held an aggregate COVID-19-related provision of Rs 547 crore as of March 31, 2022. The provision coverage ratio stood at 73.2%.

The bank’s asset quality also showed signs of improvement. Its gross non-performing assets fell to Rs 6,470 crore as of March 31, 2022, from Rs 7,426 crore a year earlier and from Rs 6,983 crore in December 2021. Net NPAs fell to Rs 1,737 crore from Rs 2,705 crore a year earlier and Rs 2,004 crore in December 2021.

The bank’s gross NPA ratio was 2.34% and net NPA ratio was 0.64%. This compares with 3.25% and 1.21%, respectively, a year earlier.