Mumbai: On Saturday, Kotak Mahindra Bank reported a 7% year-on-year (YoY) decline in net profit for the April-June quarter, with earnings falling to Rs.3,282 crore from Rs.3,520 crore in the same period last year. This fall has been attributed mainly to the 109% YoY rise in provisions and contingencies. Last year’s profit excludes the gain received on selling its stake in Kotak Mahindra General Insurance to Zurich Insurance, which was worth about Rs. 2,800 crore.
Meanwhile, the company has reported a 6% rise in Net Interest Income (NII) from Rs.6,842 crore in Q1FY25 to Rs.7,259 crore in the corresponding quarter this year.
The company has been facing challenges in its microfinance and retail commercial vehicle (CV) segment, where the gross non-performing assets (NPA) ratio has increased from 1.48% to 1.39% from last year.
In an interaction with PTI, Deputy Managing Director Shanti Ekambaram explained how small commercial vehicle operators have been struggling financially due to weak demand in goods transport, delayed payments from government contracts, and overall pricing pressures. In turn, this has resulted in an almost 35% rise in provisions from this sector.
Despite this, the company has reported a 14% year-on-year rise in advances from Rs.3,89,957 crore from last year to Rs.4,44,823 crore this year. Retail microcredit loans were about 9.7% of this pie, indicating the company’s openness to risk within this growing segment.
In the next trading session after the announcement, Kotak Mahindra’s stock prices have fallen 6% on Monday, 28 July.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
