Kotak Bank Q4 takeaways: Asset quality improves; subsidiaries shine

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NEW DELHI: The March quarter numbers didn’t simply come beneath the analysts’ estimates but in addition underperformed its friends like ICICI Bank and IndusInd Bank who declared glorious Street-beating outcomes.

Loan growth was sluggish, each sequentially and yearly, whereas revenue development was at 33 per cent. The lender reported an 8 per cent on-year development in web curiosity earnings at Rs 3,843 crore for the quarter, which was additionally beneath analysts’ estimates.

Here are the important thing takeaways:

Loan development at 2 per cent
Advances by the financial institution as on March 31, 2021 have been Rs 2,23,689 crore, up 4.5 per cent from Rs 2,14,103 crore as on December 31, 2020. On a YoY foundation, the identical stood at Rs 2,19,748 crore as on March 31, 2020, a development of 1.76 per cent.

Rs 435 cr loans restructured
Covid-related provisions as on March 31, 2021 stood at Rs 1,279 crore. In accordance with the decision framework for Covid-19 and MSME introduced by the RBI, as on March 31, 2021, the financial institution has applied, for sure eligible debtors, restructuring of Rs 435 crore (0.19 per cent of web loans).

Asset quality improves
The non-public sector lender reported a slight enchancment in asset quality as gross non-performing property ratio stood at 3.25 per cent for the quarter in comparison with 3.27 per cent within the December quarter on a proforma foundation. Similarly, web NPA ratio fell to 1.21 per cent from 1.24 per cent 1 / 4 in the past. The lender has accounted for all of the non-performing loans that weren’t acknowledged in earlier quarters because of the Supreme Court’s standstill on reporting of dangerous loans until August 31.

Dividend at 90 paise
The financial institution after a very long time additionally declared a 90 paise per share dividend. RBI had banned banks and NBFCs to declare any dividend with a purpose to protect capital in face of the pandemic. Capital adequacy ratio of the financial institution as per Basel III, as on March 31, 2021, was a sturdy 22.3 per cent and Tier I ratio was 21.4 per cent.

Subsidiaries contribute 30% of PAT
For FY21, the financial institution’s contribution to the consolidated PAT was Rs 6,965 crore out of Rs 9,990 crore. Net contribution of the subsidiaries and associates was 30% of the consolidated PAT.

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