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Shares of Kotak Mahindra Bank slipped nearly 3 per cent on Monday after the lender reported an 11 per cent drop in consolidated net profit for the September quarter.
The stock declined 2.82 per cent to Rs 2,125 on the BSE, while on the NSE, it fell 2.97 per cent to Rs 2,122.
The bank had announced on Saturday that its consolidated net profit for the September quarter stood at Rs 4,468 crore, down 11 per cent year-on-year, weighed by slower growth in core income and weak performance from some subsidiaries.
On a standalone basis, the private sector lender reported a 3 per cent fall in net profit to Rs 3,253 crore for the reporting quarter.
Total consolidated income dropped to Rs 24,901.39 crore in the second quarter of FY2025-26 from Rs 26,880.02 crore in the year-ago quarter. Standalone income, however, increased to Rs 16,239 crore during the quarter under review, from Rs 15,900 crore in the same period last year.
The bank’s Chief Executive and Managing Director, Ashok Vaswani, was non-committal on reports that the lender has completed due diligence to buy a majority stake in IDBI Bank, but also said it may be “premature” to discuss anything related to buying IDBI Bank or any other target.
He also did not refute or deny notions or speculation ascribing to Kotak Mahindra Bank.
“‘… at Kotak, we look at every single opportunity that kind of comes along. We cannot and should not be commenting upon any items which, you know, could or could not be in process,” he told reporters on a post-results conference call.
For the reporting quarter, Kotak Mahindra Bank’s core net interest income grew by 4 per cent to Rs 7,311 crore, on the back of a 16 per cent loan growth but was restricted by sharp decline in the net interest margin at 4.54 per cent as against 4.91 per cent in the year ago period.
Its chief financial officer Devang Gheewalla said that the margins will expand in the second half of the fiscal, but did not give an exact target on the key number or if they will go back to the over 5 per cent level again.
He said the cost of funds is on a decline and the deposits are also getting repriced to get it down further, but it is the yield on advances — a number not disclosed by the bank — where it will be focusing on.
Vaswani said that, going ahead, the bank would like to grow its share of higher-yielding but riskier unsecured advances, where it had been forced to go slow over the last few quarters due to stress.
The share of the unsecured advances, which include microfinance loans, credit cards and personal loans, has fallen to just above 9 per cent and the bank will like to grow it first to double digits and then to the mid-teens, he said.
From an asset quality perspective, fresh slippages came down to Rs 1,629 crore from Rs 1,875 crore in the year-ago period, and the gross non-performing assets ratio improved to 1.39 per cent as of September from 1.48 per cent in June.
(With Inputs From PTI)
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