Private sector lender Kotak Mahindra Bank posted a better-than-expected 21 percent rise in quarterly profit helped by higher loan growth, better asset quality and lower provisions.
Consolidated net profit rose to 4.63 billion rupees in the fiscal third quarter ended December from 3.84 billion rupees a year ago, the bank said in a statement.
Net interest income grew 14 percent to 10 billion rupees. It had grown about a quarter in the year-ago period.
Interest expenses grew on higher deposit rates and after it raised interest rates on savings deposits, following a deregulation in the rate by the Reserve Bank of India.
The bank was estimated to post an 18 percent rise in consolidated net profit at 4.5 billion rupees, according to Thomson Reuters I/B/E/S.
The bank posted a one-time loss of 2.2 billion rupees on sale of investments from a gain of 149.3 million rupees in the same period a year ago.
Shares of the bank, which has a market capitalisation of more than $7 billion, fell nearly 4 percent after the results, as the bank's futures and options saw a build-up of fresh short postions, with open interest position at day's end at 3.63 million shares, derivative dealers said.
Its shares have outperformed the broader market, rising nearly a fifth in the year to January 21, compared with a more than 13 percent drop in the banking index.
Net interest margin, a key gauge of profitability, stood at 4.7 percent compared to 5 percent in the same period a year ago.
"We expect to maintain margins around current levels in FY12," Jaimin Bhatt, president and group chief financial officer told reporters.
The bank's provisions for the quarter fell to 452.2 million rupees from 534.3 million rupees in the year-ago quarter.
Net non-performing assets --or bad loans -- as a proportion of net assets was at 0.47 percent this quarter from 0.69 in the year ago quarter.
The Reserve Bank of India had warned Indian banks to step up efforts to resolve bad loans and tighten risk management systems as sticky loan portfolio of small and medium enterprises was under threat of rising in a high interest rate environment.
"We are far more cautious now (on assets). We have been watching and monitoring very very closely," Dipak Gupta, joint managing director said.
Asset quality of private lenders has so far been resilient with bad loans under 0.5 percent of total assets.
India's main policy rate, at 8.5 percent, is at its highest since July 2008 after the Reserve Bank of India raised interest rates 13 times since March 2010 to try to rein in inflation.
Larger rivals HDFC Bank and Axis Bank
Source: www.moneycontrol.com
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