Private sector lender Kotak Mahindra Bank on Wednesday reported a 65% jump in its standalone profit after tax to ₹2,767 crore in 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 slippages have been extremely under control. On an annualised basis our slippage ratio is 1.08%. Our slippage ratio actually now demonstrates that the quality of our credit book is extremely robust as we exit COVID,” the bank’s managing director and CEO Uday Kotak told reporters.
Consolidated PAT for Q4 FY22 was ₹3,892 crore, up 50% from ₹2,589 crore in the fourth quarter of FY21. For the entire FY22, Consolidated PAT increased to ₹12,089 crore from ₹9,990 crore in FY21.
Kotak said the consolidated profit is truly broad based and not dependent disproportionately only on the bank.
Net Interest Income (NII) for the fourth quarter increased by 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 is higher than wholesale in the loan book.
He said the bank has a CASA (Current Account Savings Account) ratio of 60%-plus, which has a significant positive impact on cost of funds.
“We are entering into the new world of interest rates going up, with a very high current and savings account ratio. If 60% of my deposit is CASA, that is a very stable cost of fund base. I have always believed that low cost and stable liability franchise is the core to sustainable banking,” he said.
Net interest margin stood at 4.78% for Q4 FY22.
Gross Non-Performing Assets (GNPA) improved to 2.34% from 3.25%. Net NPA stood at 0.64% as against 1.21%.
Credit cost on advances for Q4 FY22 was 27 basis points (annualised), excluding reversal of COVID provisions.
The provision coverage ratio stood at 73.2%.
Total provisions (including specific, standard, COVID-related etc) held as on March 31, 2022 was at ₹6,710 crore.
Capital adequacy ratio of the bank, as per Basel III, as on March 31, 2022 was 22.7% and Tier I ratio was 21.7%.
Advances increased by 21% to ₹2,71,254 crore as on March 31, 2022 from ₹2,23,670 crore a year ago. Advances grew 7.2% (not annualised) during Q4 FY22.
Kotak said the bank’s Q4 loan growth is about 29%-plus annualised and 7.3% for the quarter.
“We have got the accelerator on loan growth. Positively for us, the bulk of our book is floating rate. So, the ability to transmit interest rate as the central bank increases, is very much inherent in our loan book. Our growth momentum on loans will continue. We are very well risk managed not only on credit quality but also on asset-liability matching and cost of funds,” he said.
On the impact of the rate hike announced by the RBI, he said rate hikes do have an impact but the 40 basis points rate hike will not change or make a dramatic difference.
The bank’s scrip closed at ₹1,776.95 apiece, up 0.17%.
Meanwhile, the bank also approved the appointment of Shanti Ekambaram as whole-time director of the bank for three years with effect from November 1, 2022, or from the date of regulatory approvals, whichever is later.
The bank also announced the reappointment of K. V. S . Manian as a whole-time director for three years (post the expiry of his current term on October 31, 2022), with effect from November 1, 2022, or from the date of regulatory approvals, whichever is later.
The bank has accepted the request of Gaurang Shah to not to continue as a whole-time director and director of the bank on the expiry of his current term which ends 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.