Kotak Bank Results

·         KMB reported consolidated PAT of Rs4.9bn, up 17.4% YoY and 28.1% QoQ, much ahead of our estimate of Rs4.0bn and consensus estimate of ~Rs3.8bn

·         On a standalone basis:

1.       PAT for the quarter stood at Rs2.48bn, up 22.8% YoY and 32.4% QoQ, much above our expectation of Rs2.0bn driven by higher than expected NII growth and provision write back during the quarter

2.       NII at Rs6.2bn for the quarter grew by 18.2% YoY and 8.8% QoQ, higher than our estimate of Rs5.8bn

3.       Operating expenses grew by 5.4% QoQ on account of a 10.0% QoQ increase in the staff expenses. As a result operating profit grew by 16.9% QoQ

4.       During the quarter there was a provision write back of Rs72mn, which boosted the bottomline

5.       Asset quality improved as GNPAs declined by 18.9% QoQ. However, provision coverage reduced to 65% from 68% in the previous quarter.  

6.       Business growth remained healthy:

·         Advances  up 41.2% YoY and 1.5% QoQ

·         Deposits up 22.5% YoY and 3.45 QoQ