Private sector lender Kotak Mahindra Bank disappointed street with its third quarter earnings on every parameter with the asset quality weakening. Standalone (banking operations only) net profit fell 6 percent year-on-year to Rs 340 crore and net interest income grew nearly 11 percent to Rs 912.7 crore. Asset quality Gross non-performing assets (NPAs) expanded 4 basis points sequentially (55 basis points year-on-year) to 2.01 percent while net NPAs jumped 14 bps quarter-on-quarter (46 bps Y-o-Y) to 1.1 percent in the quarter gone by. In absolute term, gross NPAs surged 7 percent quarter-on-quarter (45.4 percent year-on-year) to Rs 1,076.18 crore while net NPAs climbed 20 percent Q-o-Q (81 percent Y-o-Y) to Rs 584.52 crore during October-December quarter.
Provisions and contingencies increased 64.6 percent to Rs 69.74 crore in Q3 compared to a year ago period but that sequentially declined from Rs 72.29 crore. The bank restructured loans worth Rs 42 crore in the quarter ended December 2013, which was 0.08 percent of net advances. Net interest margin slipped to 4.8 percent in December quarter as against 4.9 percent in previous quarter while that was maintained compared to a year ago period. Savings deposits grew 38 percent year-on-year to Rs 9,106 crore while CASA ratio stood at 30 percent during October-December period. Return on assets dropped to 1.6 percent in the quarter gone by compared to 1.8 percent in corresponding quarter of last fiscal. Consolidated earnings Net profit on consolidated basis increased 2.4 percent to Rs 591.25 crore and net interest income grew 13.6 percent to Rs 1,399 crore compared to a year ago period, which too lower than analysts' expectations.
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