Kotak Mahindra Bank on Thursday reported 26% rise in standalone net profit at Rs 353 crore in the quarter ended September 30, boosted by a healthy growth in interest income and strong margin.
The total income increased to Rs 2,469.46 crore in the second quarter ended September 30 from Rs 2,174.50 crore a year ago. The net interest income jumped 22 % to Rs 924 crore from Rs 758 crore in the same period last year, it said.
The key profitability gauge, net interest margin (NIM), which is the difference between interest a bank pays on deposits and which it earns on advances, rose 30 bps to 4.9% during the quarter despite adverse market conditions.
The private lender's total advances rose 11% to Rs 50,609 crore as against Rs 45,443 crore a year ago.
"We consciously slowed down lending to construction equipment and commercial vehicle segments. Accordingly, there was 17 % drop in our lending to these sectors.
Excluding this, the rest of the loan portfolio has grown by 18%," Kotak Group CFO Jaimin Bhatt said.
However, he said the bank doesn't see any further de-growth in these two segments.
"The delinquency is not increasing at the same pace as it was in the past...there is some level of stabilisation. Let the industry pick up then we will review whether we need to grow it back all over again," Kotak Mahindra Bank Joint Managing director Dipak Gupta said.
There was a marginal rise in gross NPAs in Q2 at 1.97% from 1.95% a year ago, while net NPA improved a tad to 0.96% from 0.98%.
"Restructured assets continue to remain low. At the end of reporting period, restructured standard assets stood at Rs 45 crore, or 0.09% of net advances," Bhatt said.
On its exposure to the troubled publisher Deccan Chronicle Holdings, Gupta said: "We have acted under the Sarfesi Act. We have possession of some of their properties and will go to the next stage of disposing them of."
However, Gupta said it will take at least three to six months to dispose of properties. He did not reveal the bank's exposure to the troubled Hyderabad Group.
On a consolidated basis, the bank's net profit in Q2 rose 16% to Rs 583 crore from Rs 502 crore a year ago.
Consolidated NIM stood at 4.9% as against 4.6% in the same quarter last year.