The Hindu Business Line : Loans buoy Kotak Mahindra Q3 net

Mumbai, Jan 21 Kotak Mahindra Bank (KMB) has reported a 124 per cent growth in Q3 net profit at Rs 102 crore on a standalone basis against Rs 45 crore in the corresponding quarter of the previous year.

Mr Jaimin Bhatt, Chief Financial Officer, KMB, said that rise in the net profit could be attributed to the healthy year-on-year growth in the lending business which was also reflected in the increase in the net interest margin.

Interest margin

The bank’s net interest margin has increased to 5.7 per cent at the end of December, 2007, against 4.7 per cent in the previous year.

Mr Bhatt said that the bank’s improved margin was also the result of its equity issue in October, 2007. The bank had raised Rs 1,615 crore through an equity issue to qualified institutional buyers.

The capital adequacy ration of the bank was, therefore, much higher in the third quarter at 18.2 per cent, against 11.6 per cent in the year- ago-period.

The net interest income of the bank rose 103 per cent at Rs 347 crore, (Rs 171 crore).

Other income increased to Rs 204 crore, from Rs 95 crore in the previous year. Total income rose 96 per cent to Rs 887 crore (Rs 452 crore)

Stressed assets

Mr Bhatt said that the book value of company’s stressed asset business stood at Rs 600 crore, against Rs 450 crore in December, 2006.

The percentage of gross non-performing assets to gross advances (including NPAs acquired from other banks and NBFCs) stood at 2.88 per cent (3.18 per cent)

KMB’s deposits grew by 47 per cent to Rs 14,300 crore (Rs 9,700 crore) while advances increased by 54 per cent to Rs 14,600 crore (Rs 9,500 crore).

The bank has 149 branches , which it plans to increase to 250 in the calendar year of 2008.

Portfolio

Retail business accounts for 85 per cent of the bank’s portfolio while the rest came from corporates and Small and Medium enterprises. Mr Bhatt said that this business mix is likely to remain the same.

The bank’s consolidated net profit in the third quarter rose 115 per cent to Rs 363 crore (Rs 169 crore).

The shares of Kotak Mahindra Bank closed at Rs 969 on the BSE, 14.28 per cent lower than the previous close at Rs 1,131.

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