Kotak Mahindra Bank Q2 Results Meet Expectations; NPA Improve Marginally

Kotak Mahindra Bank reported its second quarterly earnings today and results were largely in line with expectations as loan growth at the private sector witnessed healthy growth. For the July-September period, net profit on a year on year basis increased by 14.8% to Rs. 1,141.6 crore.

NIM and NII at the bank also rose by 4.2% and 16.3% respectively. NII stood at Rs. 2,689 crore.

Gross non performing assets had fallen marginally from 2.17% in the previous quarter to 2.15% levels for the reporting quarter. Net bad loan also scaled down from 0.86 % to 0.81% during the second quarter of FY 19.

Provisions also came in lower at Rs. 354 crore vs Rs. 469.6 reported for the quarter ended June.

"Kotak Mahindra's earnings growth is likely to be driven by robust lending and non-interest income growth, especially as margin pressure looms from rising funding costs," Bloomberg Intelligence had said in a report.

It, however, said, "Keeping low-cost deposit growth at a comparable pace to its strong loan growth could be a challenge, which may blur the net interest margin outlook."

After the results were announced, the private sector bank which ranks second in market capitalization traded at Rs. 1,172.15 per share. On the NSE Nifty Bank Index, Kotak Mahindra Bank is the out-performer with gains of as much as 15.99%.

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