Kotak Mahindra’s Q3 profit rises 23%
BENGALURU: Kotak Mahindra Bank Ltd, India’s fifth-biggest lender by market capitalization, reported on Monday a 23% rise in third-quarter net profit, helped by higher interest income and a write-back of provisions made for mark-to-market losses.
Net profit at the private sector bank came in at ₹1,291 crore for the three months to December 31, compared to ₹1,053 crore a year earlier and roughly in line with analysts’ average estimates of a profit of ₹1,271 crore, according to I/B/E/S data from Refinitiv.
While provisions for bad loans climbed over 50% to ₹255 crore in the quarter, the bank got a write-back in the amount of ₹272 crore for mark-to-market losses.
Asset quality improved, with gross bad loans as a percentage of total loans standing at 2.07% at the end of December. That compared with 2.15% in the previous quarter and 2.31% a year earlier.
Interest earned rose nearly 25% to ₹6,250 crore in the quarter, while net interest margin the difference between interest paid and earned and a key measure of profitability—came in at 4.33%, compared to 4.27% in the year-ago quarter.
The strong results came despite the lender being involved in a tussle with the Reserve Bank of India (RBI) over chief executive officer (CEO) Uday Kotak’s stake in the bank.
The RBI has asked CEO Kotak, India’s richest banker, to cut his 29.73% stake as at September 30 to meet shareholding norms for private sector banks and ruled an issue of preference shares by the bank towards that goal did not meet its requirements.
The bank has challenged RBI’S decision in court.