Kotak Mahindra Bank’s Big Profit Jump in First Quarter of FY25
Kotak Mahindra Bank has reported a significant growth in its financial performance for the first quarter of FY25. The Profit After Tax (PAT) reached Rs 6,250 crore, an 81% increase from Rs 3,452 crore in the first quarter of FY24. This profit surge was mainly due to the selling of a stake in Kotak General Insurance to Zurich Insurance Group. Excluding the gains (net of tax) of Rs 2,730 crore from this divestment, the bank’s PAT stood at Rs 3,520 crore for the quarter.
The Net Interest Income (NII) for the first quarter rose to Rs 6,842 crore, marking a 10% year-on-year increase from Rs 6,234 crore in the same period last year. The Net Interest Margin (NIM) for the quarter was recorded at 5.02%. Fees and services income for the quarter increased by 23% year-on-year to Rs 2,240 crore, up from Rs 1,827 crore in Q1 FY24.
The operating profit of the bank for the first quarter also saw an uptick, reaching Rs 5,254 crore, a 6% increase from Rs 4,950 crore in the previous year. The bank’s customer base grew to 5.1 crore as of June 30, 2024, compared to 4.3 crore a year earlier. Customer assets, including advances and credit substitutes, grew by 20% year-on-year to Rs 435,827 crore from Rs 362,204 crore.
The percentage of unsecured retail advances, including retail microcredit, stood at 11.6% of net advances as of June 30, 2024. The average total deposits of the bank for the quarter grew by 21% year-on-year to Rs 435,603 crore, compared to Rs 361,295 crore during the corresponding period. The average current deposits increased by 5% year-on-year to Rs 62,200 crore, and average savings deposits grew by 2% year-on-year to Rs 122,105 crore for the same period.
The bank’s asset quality improved, with the Gross Non-Performing Assets (GNPA) ratio at 1.39% and the Net Non-Performing Assets (NNPA) ratio at 0.35% as of June 30, 2024, compared to 1.77% and 0.40% respectively, a year earlier. Overall, Kotak Mahindra Bank has demonstrated robust financial health and growth, driven by increased income from interest and services, as well as a notable rise in customer assets and deposits.
Doubts Revealed
Kotak Mahindra Bank -: Kotak Mahindra Bank is a large bank in India that offers various financial services like savings accounts, loans, and insurance.
First Quarter -: The first quarter refers to the first three months of a financial year. In this case, it is from April to June.
FY25 -: FY25 stands for the financial year 2025, which starts on April 1, 2024, and ends on March 31, 2025.
Profit After Tax (PAT) -: Profit After Tax (PAT) is the money a company makes after paying all its taxes. It’s like the final profit.
Rs 6,250 crore -: Rs 6,250 crore is a way to say 62.5 billion rupees. In India, 1 crore equals 10 million.
81% rise -: An 81% rise means the profit increased by 81% compared to the same period last year.
Kotak General Insurance -: Kotak General Insurance is a part of Kotak Mahindra Bank that provides insurance services like health and car insurance.
Zurich Insurance Group -: Zurich Insurance Group is a big company from Switzerland that offers insurance services worldwide.
Net Interest Income -: Net Interest Income is the money a bank earns from its loans and investments after paying interest on deposits.
Asset Quality -: Asset Quality refers to how good or bad the bank’s loans and investments are. Better asset quality means fewer bad loans.