Kotak Mah Bank

Expectations were high from this private sector bank and its Q3 numbers came in as a huge disappointment, especially the asset quality. Consolidated net profit rose 2.4% at Rs.591 crore on a 14% rise in NII at Rs.1399 crore. This had come much below what most analysts had expected and this pushed the stock into the red; it was the top loser on the BSE when it ended yesterday.

Earnings were hit mainly on account of higher provisions for bad loans at Rs.70 crore v/s Rs.42 crore in Q3FY13 but sequentially, it was down from Rs.72 crore. Gross NPA worsened to 2.01% v/s 1.46% (YoY) and net NPAs too rose from 0.64% to 1.10%. The bank restructured loans worth Rs 42 crore in current Q3, which came at 0.08% of net advances.  The Bank’s earnings were also affected due to amortized net depreciation – out of net depreciation of Rs 196.95 crore as on December 31, 2013, the bank has amortised net depreciation on held for trading or available for sale portfolio aggregating to Rs 131.30 crore till December 31, 2013.

Book value per share stands at Rs.239.90 v/s Rs.195.80 (YoY). Networth at the end of the third quarter was at Rs.18,455 crore. Advances were at Rs.71,041 crore of which the giants share went to consumer, followed by commercial and then corporate. It saw a 26% (YoY) decline in advances to commercial vehicles and construction equipments while personal loans and small businesses showed a 39% growth. CASA was at 30% compared to 26% (YoY). The Bank plans to reach 1000 branches by 2016.