Private sector lender Kotak Mahindra Bank on Saturday reported a 26 per cent rise in net income at Rs 2,071.15 crore in the June quarter, buoyed by record margins and a decline in bad loans.
On a consolidated basis, the city-headquartered financial services group, which is also into life and non-life insurance, share broking, asset reconstruction, and AIF among others, logged in 53 per cent rise in net income at Rs 2,755 crore in the June quarter over the corresponding period a year ago, the bank said.
The higher profitability is despite the bank booking a loss of over Rs 800 crore from treasury operations.
The chief financial officer Jaimin Bhatt refused to detail how much G-secs (government securities) the bank holds in excess of the regulatory requirement of 18 per cent.
In a low credit demand or bank credit scenario banks park their funds in government securities which are highly liquid assets and the average system level statutory liquidity ratio is over 23 per cent.
Explaining comparatively low amount of losses from the bond market, joint managing director Dipak Gupta told PTI that as much as 61 per cent of its bond holdings are in the AFS (available for sale) category and only 39 per cent in held to maturity segment, which has helped the bank to prevent a larger hit.
Total income for the quarter improved to Rs 8,582.25 crore from Rs 8,062.81 crore, boosted by an increase in interest income to Rs 7,338.49 crore, from Rs 6,479.78 crore in the year-ago period.
The key profitability gauge, the net interest income (NII) rose to Rs 4,697 crore, from Rs 3,942 crore, up 19 per cent on a near-record net interest margin (NIM) of 4.92 per cent.