Kotak Mahindra Bank:-
"Kotak Mahindra Bank reported muted consolidated earnings of Rs 443 crore which grew 6.6% Y-o-Y & down 14.9% Q-o-Q, below than our expectation. Standalone bank, Kotak prime and Kotak Life continued to be key growth drivers to consolidated PAT. Securities broking, investment banking and asset management businesses continued to see weak earnings and core operating performance. Net earnings from Broking, and investment banking management were down 54% & 40% sequentially reflecting challenging operating environment and falling business volumes. Kotak Life insurance‘s net profits went down 30.4% Y-o-Y to Rs32 crs owing to subdued volume growth."
"On standalone basis, NII increased 27.0% y-o-y & 4.9% q-o-q led by
strong loan growth of 30.9% y-o-y & 8.3% Q-o-Q and steady NIM.
Standalone PAT grew modestly 12.1% y-o-y and down 4.9% q-o-q mainly due
to weaker non interest income and higher loan loss provisions. Asset
quality has slipped during the quarter as gross NPAs and net NPAs
increased sharply 11.5% Q-o-Q & 43.3% Q-o-Q respectively. Provision
coverage ratio (excluding write offs) declined from 61.3% in Q4FY12 to
50.3%. Maintain Reduce."
"Financing businesses’ contribution to consolidated earnings increased
76% in Q4FY12 to 85% in Q1FY13 owing to lower-than-expected earnings
capital market linked businesses and weak earnings from Kotak life
insurance. Standalone Bank’s NII grew by 27.0% y-o-y and 4.9% on q-o-q
to Rs 721 crore led by strong loan growth and steady NIMs. Non-interest
income increased only 5.5% Y-o-Y but down 5.1% Q-o-Q mainly due to
sluggish fee income growth and lower distressed asset sale (Rs20 crore
vs. Rs65 crore in Q1FY12). Net profits reported Rs282 crore growing
12.1% y-o-y & down 4.9% q-o-q. Kotak prime (KP) reported PAT of Rs94
crore vs. Rs97 crore in Q4FY12, down 3.1% Q-o-Q. We expect the bank to
deliver 26.5% CAGR in net earnings over FY12-FY14 driven by strong loan
growth, steady NIMs and stable asset quality and improving productivity
levels."
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