Kotak Mahindra Bank Q4 profit jumps 33% to Rs. 1,682.4 crore, provisions remain high
Kotak Mahindra Bank Ltd.’s profit rose in the quarter ended March. Kotak Mahindra Bank clocked a 32.8 percent year-on-year (YoY) growth n standalone profit at Rs. 1,682.4 crore in the quarter ended March 2021, impacted by higher provisions. The profitability was supported by higher net interest income (NII), other income, and pre-provision operating profit.
Moreover, Net interest income in Q4FY21 grew by 8 percent to Rs. 3,842.81 crore compared to the year-ago quarter. But net interest margin contracted to 4.39 percent from 4.72 percent in the same period. Numbers missed analysts’ expectations. profit was estimated at Rs. 1,800 crore and NII at Rs. 4,060 crore for the quarter. According to the average estimates of analysts polled by CNBC-TV18.
Provisions and contingencies remained elevated at Rs. 1,179.41 crore for the March quarter of 2021. Increasing 12.6 percent compared to the year-ago quarter and 181.8 percent over the previous quarter. Non-interest income in Q4FY21 surged 30.9 percent year-on-year to Rs. 1,950 crore YoY. While the pre-provision operating profit grew by 25 percent to Rs. 3,407.05 crore.
Asset quality weakened further in the March quarter with gross non-performing advanced as a percentage of gross advances climbing to 3.25 percent compared to 2.26 percent in the previous quarter. While net NPA jumped to 1.21 percent at the end of Q4FY21, compared to 0.5 percent in Q3FY21.
In the fourth quarter, the bank set aside Rs. 110 crore from interest earned to refund borrowers benefitting from a Supreme Court decision in March. The apex court had asked all lenders to return the compound interest for the moratorium period to all borrowers, not just those with dues up to Rs. 2 crores.
Kotak Mahindra Bank shares corrected after earnings came in below expectations, falling 2.62 percent to Rs. 1,702.80 on the BSE.