Kotak Mahindra Bank’s consolidated net profit rises 36% in Q4FY21

Private sector lender on Monday reported a consolidated net profit of Rs 2,589 crore in the March quarter of FY21, up 36 per cent from Rs 1,905 crore in the same period last financial year.

On a standalone basis, the bank’s net profit in the same period jumped 33 per cent to Rs 1,682 crore from Rs 1,267 crore in the year-ago period due to a healthy rise in other income and a stable net interest income (NII).

The lender’s NII grew by 8 per cent in Q4FY21 to Rs 3,843 crore, from Rs 3,560 crore in Q4FY20 while the net interest margin for the reporting quarter was 4.39 per cent. Other income of the lender went up by 31 per cent to Rs 1,949 crore form Rs 1,489 crore in the same period last financial year.

Provisions and contingencies for the bank have gone up in the reporting quarter (Q4FY21) to Rs 1,179 crore as compared to Rs 1,047 quarter in the year-ago period and Rs 419 in the previous quarter. It is holding Covid-related provisions to the tune of Rs 1,279 crore at the end of March 31, 2021. The bank also said that post the apex court’s judgment vacating its interim order on standstill on asset classification, it has retrospectively, reversed income and consequently adjusted provisions and contingencies. Also, it has created a liability of Rs 110 cr towards estimated interest relief and has reduced the same from interest earned.

Total provisions held by the lender, which include specific, standard, Covid-19 related, and other provisions, stood at Rs 7,021 crore as of March 31, 2021.

The gross non-performing assets (GNPA) as a percent of advances at the end of March quarter stood at 3.25 per cent, which is almost 100 basis points (bps) higher than last year, but 2 bps lower sequentially. Similarly, net NPAs of the lender stood at 1.21 per cent, up 50 bps from last year, but down 3 bps sequentially.

The bank said it has implemented a restructuring of Rs 435 crore as per the regulator’s dispensation, which is 0.19 per cent of its net advances.

The loan book of the lender increased by 1.8 per cent to Rs 2.23 trillion at the end of March 31, 2021, compared to Rs 2.19 trillion a year ago. Total customer assets, which includes advances and credit substitutes, increased by 4.31 per cent to Rs 2.38 trillion. In the same period, the deposit portfolio has gone up by 6.57 per cent to Rs 2.8 trillion.

“Although the government has started a vaccination drive, Covid19 cases have significantly increased in recent months due to the second wave as compared to earlier levels In India. Various state governments have again announced strict measures including lockdowns to contain this spread”, the bank said.

“As Covid vaccines are administered to more and more people, businesses in sectors impacted by pandemic may pick up. However, the continuing and evolving nature of the virus has created uncertainty regarding the estimated time required for businesses and lives to get back to normal,” it further added.

For the full financial year (FY21), on a consolidated basis, the bank’s net profit increased 16 per cent to Rs 9,990 crore from Rs 8,593 crore, and on a standalone basis, in FY21, the bank’s net profit was up 17 per cent to Rs 6,965 crore, as compared to Rs 5,947 crore in FY20.

Disclosure: Entities controlled by the Kotak family have a significant shareholding in Business Standard.

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