Kotak Mahindra Bank Q3 takeaways: Bad loans rise, but management claims bank well-provisioned

NEW DELHI: Notwithstanding the Supreme Court order, Kotak Mahindra Bank’s unhealthy loans noticed an uptick by a big quantity and so did provisions in the course of the December quarter, even because the lender managed to develop at a gradual tempo.

Its key subsidiaries additionally noticed progress year-on-year because the economic system continued to get well whereas increased ranges of financial savings additionally went into monetary merchandise like equities, insurance coverage and mutual funds.

Shares of the corporate closed down 1.87 per cent to Rs 1,797 on the BSE.

Here are key takeaways from the earnings:

Profit progress regular

The bank mentioned profits for Q3 elevated to Rs 1,854 crore from Rs 1,596 crore in the identical quarter final yr, up 16 per cent. Its pre-tax revenue was Rs 2,484 crore, up 28 per cent from Rs 1,944 crore in Q3FY20.

Operating revenue was Rs 3,083 crore, up 29 per cent from Rs 2,388 crore.

The firm mentioned the revenue determine was affected by increased provisions for taxes this yr. In the identical quarter final yr, the supply for tax was decrease as a consequence of some beneficial tax orders.

Margin falls 18bps

Net Interest Income (NII) elevated to Rs 4,007 crore, from Rs 3,430 crore final yr, up 17 per cent. Net Interest Margin (NIM) for Q3FY21 was at 4.51 per cent, down 18 bps from the identical quarter final yr. .

Bad loans almost double

The bank mentioned, ignoring the Supreme Court freeze on declaring unhealthy loans, web non-performing property of the lender rose to 1.24 per cent from 0.74 per cent within the earlier quarter. Gross NPA was pegged at 3.27 per cent towards 2.70 per cent. The bank has, nevertheless, made provision for such advances together with in the direction of curiosity accrued, but not collected for the whole interval with moratorium, it mentioned.

Deposits develop 29%

Average financial savings deposits grew by 29 per cent to Rs 1,07,363 crore for the primary 9 months for this fiscal in comparison with Rs 83,049 crore in the identical interval final yr. Average present account deposits grew by 13 per cent to Rs 37,533 crore in comparison with Rs 33,258 crore.

Loans come down marginally

Advances as on December 31, 2020 had been at Rs 2,14,103 crore towards Rs 2,04,845 crore as on September 30, 2020 and Rs 2,16,774 crore as on December 31, 2019. Customer property, which incorporates advances and credit score substitutes, had been Rs 2,28,809 crore, marginally greater than final yr.

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