Kotak Mahindra Bank closes FY23 with 23% growth in profit

Kotak Mahindra Bank, one of the leading private sector lenders, has ended the financial year 2022-23 on a strong note with double-digit growth in profit on the back of rise in its net interest income as well as improvement in its asset quality.

The Uday Kotak-led bank logged a consolidated profit after tax (PAT) of ₹14,925 crore for the fiscal ended March 31, 2023, up 23% as compared to ₹12,089 crore in FY22. The net interest income (NII), the difference between interest revenues and interest expenses, increased 28% year-on-year (YoY) to ₹21,552 crore as compared to ₹16,818 crore in FY22, while the net interest margin (NIM) stood at 5.33% in FY23. Fees and services rose to ₹ 6,790 crore from ₹ 5,413 crore in FY22, up 25% YoY.

The bank’s operating profit for FY23 grew 23% to ₹14,848 crore versus ₹12,051 crore in the previous fiscal.

As of March 31, 2023, CASA ratio of a bank, the ratio of deposits in current and saving accounts to total deposits, stood at 52.8%, while capital adequacy ratio was 21.8%.  

For the fourth quarter ended March 2023 (Q4FY23), the Mumbai-headquartered bank reported a consolidated PAT at ₹4,566 crore, up 17% YoY from ₹3,892 crore in the corresponding period last year. The NII of the bank climbed to ₹6,103 crore, from ₹ 4,521 crore in Q4FY22, up 35% YoY. The NIM was 5.75% for Q4FY23. The operating profit for Q4FY23 was ₹4,647 crore, up 39% YoY from ₹3,340 crore in the same period last year.

On the asset quality front, the banking major saw its gross non-performing asset (NPA) ratio falling to 1.76% from 2.37% in the year-ago period and 1.91% in the previous quarter. The net NPA too declined to 0.41% from 0.71% in the same period last year and 0.48% in Q3FY23. However, the bank’s provisions coverage ratio stood at 79.3%.

During the quarter under review, the bank added 2.2 million net customers. As of March 31, 2023, the total customer base stood at 41.2 mn versus 32.7 mn as on March 31, 2022.

At the consolidated level, the Return on Assets (ROA) was 3.06% for Q4FY23 (annualised) versus 2.94% in Q4FY22, while the Return on Equity (ROE) was 16.9% as compared to 16.6% for Q4FY22.

As of March 31, 2023, the consolidated capital and reserves & surplus was ₹1,12,254 crore compared with ₹97,134 crore as at March 31, 2022. The book value per share was ₹563. The total assets managed by the Group stood at ₹4,20,880 crore up 10% YoY over ₹3,82,709 crore as at March 31, 2022.

The board of the bank has declared a dividend of ₹1.50 per equity share of the face value of ₹5 each, out of the net profits for the financial year ended March 31, 2023, subject to the approval at the ensuing annual general meeting of the lender. In the last one year, the bank paid a dividend of ₹1.1 per share, while the dividend yield at the current share price stands at 0.06%.

Ahead of Q4 results, Kotak Mahindra Bank share price ended at ₹1,937.70, up 1.48% on the BSE. With a market capitalisation of ₹3.85 lakh crore, the banking heavyweight has given 9% returns to its shareholders in the last one year, while it rose over 1% in the six-month period. In the calendar year, the counter has gained 6%, whereas it surged nearly 11% in a month and 2.5% in a week.