InvestorQ : How do you see the latest results of Kotak Bank for the Dec-20 quarter?
Dawn Cherian made post

How do you see the latest results of Kotak Bank for the Dec-20 quarter?

Mitali Bhutta answered.
1 year ago

For the Dec-20 quarter, Kotak Bank net profit were up by 10.8% at Rs.2602 crore on the back of lower interest costs. For the same period, Kotak Bank reported 9.54% yoy growth in consolidated revenues at Rs.14,835 crore. The major contributions to revenue growth came from insurance, treasury operations, asset management and broking. Revenues from retail banking, corporate banking and vehicle financing were lower yoy.

The operating profits for the Dec-20 quarter were up 22.81% at Rs.4129 crore. This growth in operating profits came about on account of sharply lower interest costs which was an outcome of falling interest rates and surplus liquidity in the economy due to the easy monetary policy followed by the RBI. As a result, OPM expanded from 24.83% in Dec-19 to 27.83% in the quarter ended Dec-20.

PAT for the Dec-20 quarter was up 10.8% at Rs.2602cr. Compared to operating profits, the net profits were lower due to the impact of higher provisioning and also higher taxes. As a result, the PAT margins just about improved from 17.34% to 17.54%. For the quarter end, the customer assets of Kotak Group stood at Rs.255,786 crore while net worth of the group stood at a healthy level of Rs.81,616 crore.

If you look at the break-up of the sources of Kotak group for the Dec-20 quarter, then banking operations contributed 71% to the consolidated profit after tax or PAT while 29% contributions came from the parent company’s subsidiaries and associates. The most profit accretive activities for the quarter included insurance, broking and asset management, with the capital market and risk-related businesses gaining from the pandemic.

In terms of the generation of profits of the banking operations, the Net interest income or NII of the banking operations grew by 17% yoy. During the period, the net interest margins or NIMs stood at a healthy level of 4.51% for the Dec-20 quarter. The share of current and savings accounts or CASA in total deposits moved up to 58.9% in Dec-20 compared to 53.7% in Dec-19 quarter, hinting at more stability in the source of funds on the liability side.