India's Kotak Bank Q2 profit rises 29pct, beats estimates

MUMBAI: Kotak Mahindra Bank, India's third-largest private lender by market capitalisation, announced a higher-than-anticipated quarterly profit in its latest financial report. The bank's net profit for the three months ending September rose 29% year-on-year, reaching 42.11 billion Indian rupees, surpassing analysts' expectations of 41.04 billion rupees.

Strong loan demand and a reduction in provisions for bad loans were the main drivers behind the profit surge. The bank's net interest income surged by 16% to 84.6 billion rupees, primarily due to a 25% increase in domestic loans. Deposits also expanded by 23% during the period. However, the bank's net interest margin dipped slightly to 4.31% from 4.53% due to the influx of foreign currency non-resident deposits (FCNR).

The provision for potential bad loans and other losses fell 15% to 8.04 billion rupees. While the bank's asset quality remained stable, with the gross non-performing asset ratio at 1.04% at the end of September, compared to 1.18% in the previous quarter, its other income saw a 23% year-on-year rise to 31.94 billion rupees, influenced by volatile currency and debt markets.