Kotak Mahindra Bank Q4 Profit Up 25 Per Cent On Higher Interest Income

Private sector lender Kotak Mahindra Bank, on Tuesday, announced a 25.24 per cent jump in net profit for the fourth quarter ended March 31, 2019, on the back of a robust rise in interest income.

The bank’s net profit rose to ₹1,407.80 crore for the January to March 2019 quarter, against ₹1,124.05 crore a year ago. Its net interest income grew by 18.13 per cent to ₹3,048 crore for the fourth quarter of fiscal 2018-19, compared to ₹2,580 crore a year ago.

Net interest margin stood at a robust 4.48 per cent for the fourth quarter and at 4.33 per cent for the full year. For 2018-19, the bank posted a 19 per cent jump in net profit at ₹4,865.33 crore, compared to ₹4,084.3 crore in 2017-18.

Its asset quality was stable and provisions declined 44 per cent to ₹171.26 crore in the fourth quarter of last fiscal. Gross NPAs nudged up to ₹4,467.94 crore as on March 31,2019, compared to ₹3,825.38 crore. But as a percentage of gross advances, it stood at 2.14 per cent, compared to 2.22 per cent as on March 31, 2018.

Net NPAs eased to ₹1,544.37 crore or 0.75 per cent of net advances as on March 31, 2019, against 0.98 per cent a year ago.

Uday Kotak, Managing Director and CEO, Kotak Mahindra Bank, said the bank has seen “good, stable and sustained” growth.

Bombay High Court case

When asked about the bank’s Writ Petition in the Bombay High Court on the the RBI’s promoter shareholding norms, he declined to comment as the matter is subjudice. “We truly believe we are in compliance with the law of the land in letter and spirit,” he told reporters, when asked about the hearing date being adjourned to January 2020.

Meanwhile, he also said the bank has no exposure to debt-ridden Jet Airways, or the Anil Ambani-led Reliance Group firms.

Real estate

“The bank will remain conservative on the real estate sector as the pain is still not over,” he said.

With the auto sector facing a slowdown and a perceived change in consumer behaviour due to ride hailing apps, the bank will also remain cautious in lending to the auto industry.

For 2019-20, Kotak said he expects loan growth at about 20 per cent. The board of directors of the bank proposed a dividend of ₹0.80 per share of ₹5 face value for 2018-19.