KOTAK MAHINDRA Q2 PROFIT JUMPS 51% ON LOWER TAX EXPENSES

BENGALURU:Kotak Mahindra Bank Ltd reported a bigger-than-expected 51% jump in its secondquarter net profit on Tuesday, boosted by higher interest income and lower tax expenses.

Kotak’s stellar results come at a time when Indian banks, already saddled with nearly $150 billion in bad loans, are struggling to grow their lending activity as a slowdown in domestic consumption weighs on demand for credit.

Credit growth at Indian banks dropped to the lowest level in nearly two years, latest Reserve Bank of India (RBI) data showed.

Kotak’s loan growth during the quarter slowed to 15%, versus a growth of 18% last quarter and 21% in the same period last year.

For the three months to September 30, net profit surged 51.1% to ₹1,724 crore—its highest in at least 17 years—versus ₹1,142 crore last year, the Mumbaibased private-sector lender said in a filing to the exchanges.

Thirteen analysts, on average, had expected a profit of ₹1,523 crore, according to Refinitiv data.

Interest earned during the period rose 16.6% to ₹6,762 crore, while tax expenses dropped 37.3% to ₹376 crore.

Net interest margin, a key indicator of a bank’s profitability, rose to 4.61% from 4.19% last year.

Meanwhile, gross bad loans as a percentage of total loans, a measure of asset quality, ticked up to 2.32% by the end of September quarter against 2.19% in the previous quarter. This was 2.15% during the same period a year ago.

CASA (current account savings account) ratio as on September 30 stood at 53.6% compared to 50.2% as on September 30 last year.