Private sector lender Kotak Mahindra Bank on Monday reported 8.5 per cent decline in its standalone net profit to Rs 1,244.45 crore in the first quarter ended June 30. The bank had posted a net profit of Rs 1,360.20 crore in the year-ago period.
However, the Q1 FY21 net profit remained nearly flat when compared sequentially from Rs 1,266.60 crore in March quarter. Total income (standalone) too declined to Rs 7,685.40 crore in April-June quarter of 2020-21, over Rs 7,944.61 crore in the same period of 2019-20, Kotak Mahindra Bank said in a regulatory filing.
The bank's provisioning for bad loans and contingencies were raised substantially to Rs 962.01 crore for the quarter ended June 2020 as against Rs 316.76 crore, it said. However, it was down quarter-on-quarter from Rs 1,047.47 crore provisioning and contingencies for three months ended March 2020.
On the asset quality front, the lender witnessed a slight deterioration, as the gross non-performing assets (NPAs) rose to 2.70 per cent of the gross advances as on June 30, 2020 from 2.19 per cent in the year-ago period. In absolute value, the gross NPAs or bad loans amounted to Rs 5,619.33 crore, higher than Rs 4,613.52 crore a year ago.
Net NPAs increased to 0.87 per cent (Rs 1,777.10 crore) from 0.73 per cent (Rs 1,524.38 crore). On consolidated basis, the bank reported 4.1 per cent fall in net profit at Rs 1,852.59 crore in Q1FY21, compared to Rs 1,932.21 crore in the year-ago period.
Total income (consolidated), however, rose to Rs 12,323.15 crore from Rs 12,129.56 crore. The continued slowdown in economic activities has impacted lending business, fee income generation from sale of third party products or usage of debit/ credit cards, collection efficiency, Kotak Mahindra Bank said on the impact of coronavirus pandemic.
This slowdown may impact customer defaults and consequently increase in provisions at the group level. There is a high level of uncertainty regarding the time required for life and business to get normal, the bank said. "The extent to which COVID-19 pandemic will impact the bank's operations and financial results is dependent on the future developments, which are highly uncertain, including among many other things, any new information concerning the severity of the pandemic and any action to contain its spread or mitigate its impact," it said.
Stock of Kotak Mahindra Bank trading at Rs 1322.30 apiece on BSE, down 2.04 per cent from the previous close.