|Kotak Bank 1QFY21 Result||1QFY21||4QFY20||1QFY20||QoQ%||YoY%|
|Net Interest Income||3724||3560||3161||4.6%||17.8%|
|Fee and Services||776||1270||1162||-38.9%||-33.2%|
|Net Total Income||4498||5049||4478||-10.9%||0.4%|
|Other Operating Expenses||963||1354||1177||-28.9%||-18.2%|
|Provision On Adv/Receivables (net)||353||373||273||-5.4%||29.3%|
|General provision – COVID related||616||650||–||-5.2%||–|
|Provision On Investments||(7)||24||44||-129.2%||-115.9%|
|Provision and Contingencies||962||1047||317||-8.1%||203.5%|
|Profit Before Tax||1662||1678||2082||-1.0%||-20.2%|
|Provision For Tax||418||411||722||1.7%||-42.1%|
|Gross NPA (%)||2.70%||2.25%||2.19%||(45) bps||(51) bps|
|Net NPA (%)||0.87%||0.71%||0.73%||(16) bps||(14) bps|
|PCR||68.40%||69%||67%||(60) bps||140 bps|
- Net interest income grew by 17.8% YoY and 4.6% QoQ at Rs 3724 cr led by decline in interest expenses.
- Net profit declined 8.5% YoY and 1.8% QoQ at Rs 1244.45 cr.
- Loan growth declined 2% YoY and 7% QoQ but total assets grew strongly at 20% YoY and 5% QoQ funded by higher CASA and borrowings.
- The strong traction on CASA continued with growth of 34% in average savings deposits.
- Total deposits grew 12% YoY with CASA deposits growing faster at 27% YoY.
- GNPAs rose sharply by 12% QoQ to 2.7% as management chose to recognize the pain upfront.
- The bank has unbooked gains of Rs 3000 crore on the bond portfolio as of June 30, 2020.
- The moratorium is higher on SME loans. The moratorium on real estate is not higher than other wholesale loans.
- Board has approved renewal for Mr. Uday Kotak and Mr. Dipak Gupta for 3 years from January 2021
- Negative loan and credit substitute growth, Net Interest Income still grew 17.8% reflecting better quality of earnings at lower risk.
- 95% of loans under moratorium-2 are from moratorium-1. 80% of moratorium-2 loans are secured.
- The bank has been very selective in offering moratorium-2.
- Mr Uday Kotak’s clear message was that the bank will not shy away from showing more NPLs and credit costs.
- Other income was lower as it has chosen not to book profits but earn interest on investments.
- Provision hit of Rs 960 Crore (including 620 crore Covid provisions) – cumulative Rs 1270 cr. (62 bps of overall advances).
- CASA ratio of 56.7% – savings growth across all retail customer segments.
Private lender Kotak Mahindra Bank delivers weak Q1 performance. The bank also becomes the first of the large private banks to report a decline in its loan book. The bank will continue to focus on lending to SMEs under the Emergency Credit Line Guarantee Scheme (ECLGS) scheme. The bank disbursed only INR 5.5bn towards the scheme in Q1FY21. Mr Uday Kotak’s clear message was that the bank will not shy away from showing more NPLs and credit costs. Despite slower-than-sector loan growth , overall commentary is positive we will see some positive upside movement in coming quarter.
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