The Hindu Business Line : Kotak Mahindra net doubles on higher treasury profits

Propelled by higher profits from treasury operations and wholesale banking, Kotak Mahindra Bank reported a 100-per cent jump in net profit at Rs 142 crore in the third quarter ended December 31, 2009. The private sector bank had recorded a net profit of Rs 71 crore in the third previous quarter.

The consolidated net profit, which, among others, includes profit contributions from Kotak Securities, Kotak Mahindra Prime, Kotak Mahindra Old Mutual Life Insurance, and Kotak Mahindra Asset Management Company, shot up by 153 per cent in the reporting quarter to Rs 331 crore (Rs 131 crore in Q3FY2009).

A break-up of the standalonetotal income shows that while interest/ discount on advances/ bills were marginally lower at Rs 645 crore (Rs 659 crore), income on investments rose by 32.50 per cent to Rs 187 crore (Rs 141 crore). Further, other income increased by 33 per cent to Rs 145 crore (Rs 109 crore).

The bank managed to rein in expenditure with interest expended coming down by 18 per cent to Rs 346 crore (Rs 421 crore) even as operating expenditure was almost flat at Rs 294.54 crore (Rs 294.12 crore). “Our bank witnessed all round growth in corporate banking, mortgages, auto and agriculture loans,” said Mr Jaimin Bhatt, Chief Financial Officer.

In the reporting quarter, deposits grew 17 per cent quarter-on quarter to Rs 22,186 crore (Rs 18,900 crore) and advances were up 9 per cent to Rs 21,400 crore (Rs 19,700 crore).

The bank, according to Mr Bhatt, made higher provisioning of Rs 127 crore (Rs 88 crore in Q3FY2009)

in an effort to reach the loan loss provisioning of 70 per cent by September 2010, as directed by the Reserve Bank of India. As of December-end 2009, the loan loss provisioning stood at 50 per cent.

As of December-end 2009, gross non-performing assets at Rs 928 crore (Rs 706 crore as of December-end 2008) were up by 31 per cent even as net non-performing assets were marginally lower at Rs 467.51 crore (Rs 470 crore).