Priyanka Tiwari
Share
Suspense crime, Digital Desk : For the quarter that ended in March (Q4 FY25), Kotak Mahindra Bank recorded standalone net profit at ₹3,552 crore which is a drop of 14% year-on- year. There was a decline in profits in spite of an increase in loan and deposit growth as the bank increased its provisions significantly to protect the quality of its assets.
Stand alone net profit came at a margin of 4.97% with the forecasts for Net interest income(NII) standing at ₹7284 crore which was higher by 5% as compared to previous year.
Along with these Kotak declared a dividend of ₹2.50 per share while maintaining the stance on the gross NPA at 1.42% which is higher than 1.50% in December 2024.
Monitor The Market Evaluation Post Box Kotak.
Key Financial Highlights - Q4 FY25
Provisions & Contingencies: ₹909 crore (over 3x YoY)
Divided Declared: ₹2.50 Per Share
Loan Growth: Above 13% YoY
Net Interest Naargin: ₹ 7284 crore ( 5% CAGR YoY)
Deposits Growth: 15% CAGR YoY
Interest Income Net NII: 7,284 crore 4% Cagr yo of the deposit and interest margin.
Sustaining Postion Dipolition.
Margin Pressure from Benchmark-Linked Loans
The net interest margin (NIM) has dropped to 4.97% from 5.28% the previous year which indicates pressure from the external benchmark tied loan book. During periods when interest rates are declining, there is a faster reduction in loan yields in comparison to deposit rates, leading to a squeeze in margins in the short-term. Some improvement was seen sequentially from 4.93% in Q3 FY25 to 4.97%.
Regulatory Update and Operational Recovery
On February 2025, Kotak had its digital onboarding and credit card issuance restricted by the Reserve Bank of India for 10 months due to IT system infractions. With this barrier gone, the bank can invest more aggressively in procuring new customers digitally.
Market Performance and Outlook
As for the stock market reaction, Kotak Mahindra Bank's shares decreased by 0.95% finishing at ₹2,185 in BSE on Friday.
The earnings results depict a situation where overall profitability has softened, however, fundamental operating metrics which include advances, deposits and the asset quality are more than stable which gives cautiously positive forecast FY26.
