Kotak Mahindra Bank Q1 Results: Net profit soars 81% yoy to ₹6,250 crore

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Kotak Mahindra Bank’s first quarter (Q1FY25) net profit soared 81 per cent year-on-year (yoy) to ₹6,250 crore, with the bottom line being buoyed by ₹2,730 crore the Bank received from the sale of its majority stake in Kotak General Insurance to Zurich Insurance Group.

The private sector lender had reported a net profit of ₹3,452 crore in the year ago quarter (Q1 FY24).

Excluding the aforementioned gains (net of tax), the Bank’s net profit edged up 2 per cent yoy in Q1 FY25 ₹3,520 crore.

KMB’s consolidated net profit for Q1 FY25 was ₹7,448 crore (including ₹3,013 crore from divestment of 70 per cent stake in Kotak General Insurance), up 79 per cent yoy from ₹ 4,150 crore in Q1 FY24.

Consolidated net profit, excluding the aforementioned gains (net of tax), at 4,435 crore, up 7 per cent yoy.

Consolidated results include the numbers of entities such as Kotak Securities, Kotak Mahindra Prime, Kotak Asset Management & Trustee Company, Kotak Mahindra Life Insurance , Kotak Mahindra Investments, Kotak Mahindra Capital Company and Pital Company 81 55 BSS Microfinance.

Standalone results

Net interest income (difference between interest income and interest expenses) was up 10 per cent at ₹6,842 crore (₹6,234 crore in the year ago period).

Other income, including income / commission from non-fund-based banking activities, fees, foreign exchange earnings, profit / loss on sale of assets, profit / loss (including revaluation) from investments, among others, increased by 9 per cent per cent to ₹1,165 crore (₹959 crore).

Net interest margin declined to 5.02 per cent against 5.57 per cent in the year ago period.

GNPAs position improved to 1.39 per cent of gross advances as at June-end 2024 against 1.77 per cent as at June-end 2023. Net NPAs position too improved to 0.35 per cent of net advances against 0.40 per cent.

Non-tax provisions jumped 58 per cent to ₹578 crore (₹365 crore).

Deposits increased by 16 per cent yoy to ₹4,47,418 crore. Low-cost CASA (current account, savings account) deposits declined to 43.40 per cent of total deposits against 49 per cent in the year ago quarter.

Advances rose 20 per cent yoy to ₹405,957 crore, with consumer and commercial credit growing 20 per cent, respectively; corporate and SME growing 21 per cent, respectively; and other 31 per cent.

On the RBI’s April 2024 order, directing the Bank to cease and desist onboarding new customers through the Bank’s online and mobile banking channels and issuing fresh credit cards, the Bank said it has appointed an external auditor, with the scope of the audit finalized in consultation with the regulator.

Further, the Bank has augmented capacity through onboarding external IT vendors to expedite compliance.