In a recent financial disclosure complemented by a surge in net interest income, Kotak Mahindra Bank (KMB) reported an 18% leap in its Q4 net profit, reaching an impressive ₹4,133 crore. This marks a substantial gain over the preceding year’s figure of ₹3,496 crore. The growth was buoyed by a robust 13% Year-on-Year (YoY) increase in Net Interest Income (NII), which stood at ₹6,909 crore for the quarter concluding on March 31, 2024.
The period also saw recoveries and upgrades tallying ₹772 crore, despite the bank writing off retail unsecured loans amounting to ₹1,455 crore. Reflecting the bank’s resilience and strategic financial management, the total provisions towards advances were maintained at ₹5,903 crore, as per the details shared in the bank’s investor presentation.
The stellar performance wasn’t restricted to just the last quarter; for the financial year 2024, KMB’s standalone net profit showcased a remarkable growth of 26%, ascending to ₹13,782 crore, a substantial increase from the previous year. What’s more, the bank’s NII for the fiscal year surged 21% YoY, reaching ₹25,993 crore, up from ₹21,552 crore reported in FY23.
In a move that will likely please the shareholders, KMB’s Board has proposed a dividend of ₹2 per equity share with a face value of ₹5 for the fiscal year 2024.
KMB, in a regulatory filing, disclosed that its operating costs rose to ₹16,679 crore in FY24, compared to ₹13,787 crore in FY23. Within the ambit of its expenditures, technology expenses accounted for 10% of the operating cost in FY24. Following the Reserve Bank of India’s directive dated April 24 to halt onboarding new online customers, issuing credit cards, and engaging mobile banking channels, KMB is planning to amplify its investments to enhance its technological framework.
“We are totally committed to work with all our regulators to achieve the required technology standards,” the bank affirmed during the investor presentation. KMB pledged to bolster its IT systems and expedite the execution of a comprehensive plan to ensure core banking resilience. To further consolidate its position in the digital age, the bank also expressed its commitment to reinforce its digital payment security controls.
On the operational front, KMB reported a remarkable 32% YoY increase in its operating profit for FY24, registering ₹19,587 crore. For Q4 FY24 specifically, the operating profit ascended by 18% YoY to ₹5,462 crore.
Reflecting a healthy loan book, as of March 31, 2024, the bank’s advances amplified by a substantial 20% YoY to ₹391,729 crore. Moreover, the asset quality witnessed improvement, with the Gross Non-Performing Assets (GNPA) ratio contracting to 1.39% and the Net Non-Performing Assets (NNPA) ratio tightening to 0.34% on the stated date. This compared favorably to a GNPA ratio of 1.78% and NNPA ratio of 0.37% as of March 31, 2023.
The bank’s financial robustness extended to its consolidated results as well. The consolidated profit after tax for FY24 soared to ₹18,213 crore, marking a 22% YoY increment from ₹14,925 crore registered in FY23. Particularly for Q4 FY24, the consolidated PAT climbed to ₹5,337 crore, evidencing a solid 17% YoY growth.
Through disciplined financial strategies and a keen focus on technological advancements, Kotak Mahindra Bank not only fortified its market position but also laid down a strong foundation for sustained growth as it navigates the evolving landscape of the banking sector.
