Kotak Mahindra Bank reported a 14% year-on-year drop in standalone net profit for the quarter ended March 2025. The bank posted a profit of ₹3,552 crore in Q4 FY25, compared to the same quarter last year.
The fall in profit was mainly due to a sharp rise in provisions and contingencies, which jumped more than three times to ₹909 crore. This indicates that the bank is being extra careful about maintaining its asset quality.
Despite the higher provisions, Kotak Mahindra Bank’s asset quality showed slight improvement. Its gross non-performing assets (GNPA) ratio came down to 1.42% at the end of March 2025 from 1.50% in December 2024.
The bank saw good growth in business. Its total advances increased by 13% compared to last year, while deposits grew by 15% during the same period.
Net interest income (NII) increased by 5% to ₹7,284 crore. Net interest margin (NIM), on the other hand, came down to 4.97%, from 5.28% in the same quarter last year. NIM inched up sequentially from 4.93% in the quarter ended December 2024.
The decline in margin is because most of the loans of the bank are tied with external benchmarks. Reducing interest rates by the RBI lowers the interest on loans immediately, but reduces deposit rates with a lag. This short-term puts pressures on profit margins.
The board has approved dividend of ₹2.50 per share for shareholders.
Earlier in February this year, the Reserve Bank of India lifted a 10-month restriction on Kotak Mahindra Bank, which had prevented it from issuing new credit cards and onboarding customers online because of concerns with its IT system.
The bank’s stock fell by 0.95% to ₹2,185 on the BSE on Friday.
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Source: Moneycontrol.
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