Kotak Mahindra Bank Reports Q1 Profit Decline

Kotak Mahindra Bank announced a consolidated net profit of Rs 4,472 crore for the June quarter, a notable decrease from Rs 7,448 crore in the same period last year. This decline is attributed to a one-time gain of over Rs 3,000 crore from the sale of a stake in its general insurance business last year.

Factors Influencing the Bank's Performance

The bank's standalone net profit fell by 7% year-on-year to Rs 3,282 crore. Key factors include falling core income due to RBI rate cuts, slower fee income growth, and elevated provisions. Despite a 6% rise in net interest income (NII) to Rs 7,259 crore, supported by 14% loan book growth, the net interest margin (NIM) contracted by 37 basis points to 4.65%.

Challenges and Future Outlook

Provisions more than doubled to Rs 1,200 crore, with significant allocations for stress in the microfinance segment and the retail commercial vehicle portfolio. Fresh slippages increased to Rs 1,812 crore, pushing the gross NPA ratio up to 1.48%. However, the bank remains optimistic about growth in other retail loan segments and aims to grow its book at 1.5 to 2 times the nominal GDP growth of India.