Kotak Mahindra shares down nearly 5% as Q1 net profit falls
Earlier this week, public sector banks such as Punjab National Bank, Union Bank of India and Syndicate Bank had reported lower net profits due to a surge in bad loans or NPAs.
Net profit dropped to 1.89 billion rupees ($29.52 million) for its fiscal first quarter to June 30 from 4.29 billion rupees a year earlier, Kotak said in a statement on Thursday.
Provisions and contingencies of the bank during the quarter increased more than 10-fold to Rs 321.90 crore as against Rs 27.24 crore at the end of first quarter a year ago. “Erstwhile ING Vysya Bank’s integration challenges were not only reflected in higher costs, but also in slower revenue momentum with loan growth of consolidated entity at sub?10 per cent levels and muted fee income”. Yet, the bank expects additional provisions of about 0.4-0.5 per cent of the combined book in the current year.
On a standalone basis, the net profit plunged to Rs 190 crore in the quarter under review from Rs 429 crore in the same period a year ago.
Kotak Mahindra agreed in November to buy ING Vysya for around Rs 15,000 crore in an all-stock deal in what was the country’s biggest bank takeover.
Other income fell 6 per cent to Rs 967.23 crore from Rs 1,024.54 crore previous year.
Net interest income, or the difference between interest earned and that expended, increased to Rs2163.
However, State Bank of Mysore reported a profit of Rs 94.07 crore for the quarter ended June 30. Net NPA too inched higher to 1.04 per cent against 0.92 per cent in the March quarter. 78 crore in the first quarter of the year.