Kotak Mahindra Bank: Q1FY15 Result Analysis
Nutan Gupta / 16 Jul 2014
Kotak Mahindra Bank reported stable earnings for the first quarter ended June 30, 2014. On a consolidated basis its net profit grew by 11.3% on YoY basis to stand at Rs 698.3 crore during April-June quarter.
Kotak Mahindra Bank reported stable earnings for the first quarter ended June 30, 2014. On a consolidated basis its net profit grew by 11.3% on YoY basis to stand at Rs 698.3 crore during April-June quarter. This is mainly on account of lower provisions and higher other income. However, higher operating expenses limited the profitability of the bank. Consolidated net interest income rose 9.9% to Rs 1510.07 crore compared to Rs 1374.04 crore on YoY basis while other income (non-interest income) jumped 38% to Rs 1871.27 crore during the June quarter. This is mainly aided by profit on sale of investments including revaluation (insurance business), which also includes commission, fees, exchange, brokerage income.
The operating expenses during the quarter went up 42.9% to Rs 2322.82 crore compared to Rs 1625.72 crore in the same quarter last year due to policy holders’ reserves, surrender expenses and claims. Asset quality of the bank improved in the quarter gone by on sequential basis. Gross non-performing assets (NPA) declined to 1.56% as against 1.63% on QoQ basis and 1.58% on YoY basis. Net NPAs slipped to 0.81% in June quarter from 0.88% on QoQ basis.
Its subsidiaries like Kotak Mahindra Prime, Kotak Securities and Kotak Mahindra Oil Mutual Life Insurance reported net profit of Rs 126 crore, Rs 44 crore and Rs 65 crore as against Rs 120 crore, Rs 68 crore and Rs 49 crore on YoY basis respectively.
On standalone basis (only banking business), the numbers were as per the street expectations with the net profit rising 6.7% on yearly basis to Rs 430 crore and net interest income increasing 9.3% to Rs 1002 crore during Q1FY15.
Advances as on June 30, 2014 were up 13% on YoY basis to Rs 56922 crore, while without considering commercial vehicle/commercial equipment lending; the growth in advances was 20% on yearly basis. The provision-coverage ratio on non-performing assets stood at 57.2% as on June 2014. Savings deposits of the bank grew 37% on yearly basis to Rs 11013 crore while total deposits jumped 17% to Rs 61407 crore in the quarter ended June 2014.
The stock closed the day at Rs 884, up by 1.47% on BSE. The stock, at the current market price trades at a P/BV of 3.45x.
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