Private sector lender Kotak Mahindra Bank on Wednesday reported a 65% jump in its standalone profit after tax for the quarter ended March, helped by higher growth in net interest income and healthy asset quality.
For the full financial year 2021-22, PAT increased by 23% to ₹8,573 crore.
“If you look at our Q4 numbers, our slippage is extremely under control. Our slippage ratio is 1.08% on an annualized basis. Our slippery ratio really shows that our credit book quality is extremely strong as we exit COVID-19 Uday Kotak, managing director and CEO of the bank, told reporters.
Consolidated PAT for Q4 FY22 stood at ₹3,892 crore, up 50% from ₹2,589 crore in Q4 FY21. For the full FY 2012, consolidated PAT increased to Rs 12,089 crore from Rs 9,990 crore in FY 2011.
Kotak said the consolidated profit is really broad and does not depend solely on the bank.
Net interest income (NII) for the fourth quarter rose 18% to ₹4,521 crore from ₹3,843 crore.
Kotak said the bank’s NIM (net interest margin) has always been high as the mix of retail in the loan book is higher than wholesale.
He said that the CASA (Current Account Savings Account) ratio of the bank is more than 60%, which has a significant positive impact on the cost of funds.
“We are entering a new world of rising interest rates, with very high current and savings account ratios. If I have a CASA of 60% of my deposits, that is a very stable cost of funds base. I always assumed That low cost and stable liability franchise is the core of sustainable banking,” he said.
Net interest margin for Q4 FY22 stood at 4.78%.
Gross Non-Performing Assets (GNPA) increased from 3.25% to 2.34%. Net NPAs stood at 0.64% as against 1.21%.
Credit cost on advances for Q4 FY22, excluding reversal of COVID provisions, stood at 27 basis points (annualised).
The provision coverage ratio stood at 73.2%.
The total provisioning (including specific, standard, COVID-related etc.) held up to March 31, 2022 was ₹6,710 crore.
The Bank’s Capital Adequacy Ratio, as per Basel III, was 22.7% as on March 31, 2022 and Tier I Ratio at 21.7%.
Advances grew by 21% to ₹2,71,254 crore as on March 31, 2022, from ₹2,23,670 crore a year ago. Advances grew by 7.2% (not yearly) during Q4 FY22.
Kotak said the bank’s Q4 loan growth is around 29%-plus yearly and 7.3% for the quarter.
“We’ve got the accelerator on credit growth. Positively for us, the bulk of our book is floating rate. So, the ability to transmit interest rates as the central bank grows is very much embedded in our loan book. Our growth momentum is But the debt will continue to be. We are very well placed at risk not only on credit quality but also on asset-liability matching and cost of funds.”
On the impact of the rate hike announced by the RBI, he said a rate hike has an impact but a rate hike of 40 basis points will not change or make a dramatic difference.
The bank’s stock closed at ₹ 1,776.95, up 0.17%.
Meanwhile, the bank also approved the appointment of Shanti Ekambaram as a whole-time director of the bank for a period of three years with effect from November 1, 2022 or from the date of regulatory approval, whichever is later.
The bank also announced the reappointment of KV S. Manian as a whole-time director for three years (after the end of his current term on October 31, 2022), with effect from November 1, 2022, or from the date of regulatory approval, whichever is later.
The Bank has accepted the request of Gaurang Shah not to continue as Whole Time Director and Director of the Bank on the expiry of his current term, which expires on October 31, 2022.
Mr Shah will continue as director of Kotak Mahindra Asset Management Company, Kotak Mahindra Life Insurance, Kotak Mahindra General Insurance, Kotak Investment Advisors, Kotak Mahindra (UK), Kotak Mahindra Inc. and Kotak Mahindra Asset Management (Singapore) Pte.