11,678.50-119.4
Stock Analysis, IPO, Mutual Funds, Bonds & More

Kotak Bank’s provisions spike & NII jumps in Q3: Key takeaways

The bank saw a spike in provisions and deterioration in asset quality.

, ETMarkets.com|
Last Updated: Jan 20, 2020, 03.11 PM IST
0Comments
CREDIT SUISSE ON KOTAK BANK
The lender’s net interest income (NII) for Q3FY20 increased to Rs 3,430 crore from Rs 2,926 crore in Q3FY19, up 17 per cent.
Private lender Kotak Mahindra Bank on Monday reported 24 per cent year-on-year (YoY) rise in standalone profit at Rs 1,596 crore for the December quarter, missing Street estimates.

The bank saw a spike in provisions and deterioration in asset quality. Meanwhile, its tax outgo halved thanks to reduced corporate tax rates.

Here are key takeaways from the bank’s Q3 results:

NII rises
The lender’s net interest income (NII) for Q3FY20 increased to Rs 3,430 crore from Rs 2,926 crore in Q3FY19, up 17 per cent. Net interest margin (NIM) came at 4.69 per cent was also better than 4.31 per cent in Q3FY19.

Asset quality deteriorates
Gross non-performing assets (NPA) for the quarter stood at 2.46 per cent, which was higher than 2.32 per cent in the September quarter and 2.07 per cent in the December quarter of 2018.

Provisions spike
The bank made provisions and contingencies of Rs 444 crore for the quarter compared with Rs 407.93 crore in the September quarter. Provisions on a yearly basis towards advances increased 69 per cent to Rs 432 crore from Rs 255.03 crore in Q3FY19.

CASA ratio improves
CASA ratio as on December 31 stood at 53.7 per cent compared with 50.7 per cent as on December 31, 2018. TD Sweep deposits were 7.4 per cent of the total deposits. Cost of saving account for Q3FY20 was 5.27 per cent.

Tax outgo halves

The company exercised the new corporate tax rate and hence the tax outgo came down by 48 per cent for the lender. It paid Rs 348.17 crore in taxes this quarter, down from Rs 679.78 crore in the corresponding quarter last year.

Slow growth in retail segment
Kotak Mahindra Bank registered strong growth in corporate and treasury portfolio, but retail banking segment lagged. Revenue from corporate banking segment was at Rs 3,458 crore, up 19.57 per cent YoY while revenue from treasury portfolio grew 20.92 per cent to Rs 1,699 crore. Revenue from retail banking segment was up 5.8 per cent to Rs 3,835 crore.

Consolidated AUM up 29%
Total assets managed by the group as on December 31 were up 29 per cent at Rs 2,63,006 crore from Rs 2,03,222 crore as on December 31, 2018. This includes assets from its life insurance, AMC, Securities and other subsidiaries.

CAR grows
Capital adequacy ratio at the end of Q3, as per Basel III was at 18.2 per cent. This is up about 2 per cent from 16.52 per cent in the same quarter last year. The Tier I ratio was 17.7 per cent.
Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service