Private sector Kotak Mahindra Bank Wednesday reported a 23 percent jump in consolidated net profit in the September quarter at Rs. 718 crore, driven by a healthy rise in non-interest income.
The city-based Kotak Group that operates the bank and a host of other financial services companies had reported a net profit of Rs. 583 crore in the year-ago quarter.
On a standalone basis, the bank’s net profit rose 26 per cent to Rs. 445 crore in the second quarter ended September 30 from Rs. 353 crore a year ago.
Non-interest income shot up 34.68 per cent to Rs. 400 crore, driven by a healthy rise in revenue from fees and services, which increased to Rs 315 crore during the reporting quarter, up from Rs. 212 crore in the year-ago period.
Even though it posted a robust 20 per cent increase in advances, the private lender’s core net interest income was up 12 per cent at Rs. 1,039 crore during the quarter.
Kotak Bank President and Group Chief Financial Officer Jaimin Bhat said loan growth was fuelled largely by the corporate book, which expanded 44 percent while agriculture division’s growth was at 28 percent.
The rate of de-growth in the commercial vehicle and construction equipment book has also slowed down, the bank’s Joint Managing Director, Dipak Gupta said, adding the lender is “optimistic” about the portfolio.
Net interest margin was stable at 5 per cent in Q2.
The bank, which cut basic savings bank rate offering, is not mulling any revision in term-deposit rates immediately, Gupta said, conceding the liquidity position is very comfortable and there is a downward pressure on rates.
On lending rates, Gupta said the bank is unlikely to review the base rate or but added its asset liability committee meets every week to assess the situation.
Its asset quality marginally improved to 1.89 per cent on a consolidated basis from 1.97 per cent a year-ago.
Among subsidiaries, Kotak Securities saw net profit rise to Rs. 66 crore from Rs. 40 crore a year ago, while auto loan arm Kotak Mahindra Prime’s net was flat at Rs. 125 crore.
Asked about the outlook on investment banking, given the increase in issuances, Gupta sought to negate notions of it helping the bank, saying there is little left to the arranger by the issuer.