Tax break boosts Kotak Bank group net 38% to Rs 2,407 cr

Fourth largest private sector lender Kotak Mahindra Bank reported a 38% jump in consolidated net at Rs 2,407.25 crore on tax gains, but flagged loan growth going ahead given the deepening growth worries.

On a stand-alone basis, its net jumped 51% to Rs 1,724 crore. Joint managing director Dipak Gupta said asset quality issues have arisen in all the segments, including the otherwise resilient retail side as well, forcing it to be cautious about loan growth in the remaining part of the current fiscal.

The bank, which booked a 15% growth in advances in the reporting quarter, expects loan growth to slow down to "mid-teens" for the fiscal year, Gupta told reporters.

"There are opportunities of growth as well. We need to

price the 70% people well and stay away from the risky 30%," he said.

The stock of gross non-performing assets grew to 2.32% due to a Rs 1,000-crore fresh slippages, from 2.19% in the preceding quarter, while net NPAs stood at 0.85%.

Gupta said there has been a "gentle uptick" in gross NPAs and the stress is coming from all the segments, adding the stock of loans overdue for 60-90 days is Rs 431 crore which is 0.2% of net advances.

The upward movement is both from the retail book, including the secured side and unsecured side, he said.

The bank's tax expense went down to Rs 545.63 crore from Rs 835.79 crore on a consolidated basis as it took the advantage of the new tax regime.

On a stand-alone basis, net interest margin widened to 4.61% from 4.49% on stable yields and fall in cost of funds, coupled with a jump in low-cost retail deposits. Of this the low cost Casa ratio stood at 53.6%, up from 50.2% as average savings deposits grew 20% to Rs 80,425 crore and average current account deposits grew 22% to Rs 33,216 crore.