Kotak Mahindra Bank PAT jumps 18% to Rs 4,133 crore YoY, vows investments to fortify IT systems

First earnings post RBI action: The Kotak Mahindra Bank (Bank), which announced its results for the quarter ending March (Q4FY24) on Saturday, registered 18 per cent year-on-year (YoY) growth in profit after tax (PAT) to Rs 4,1330.30 crore, while its net interest income (NII) in Q4 rose 13 per cent YoY to Rs 6,909 crore.

Notably, Kotak Mahindra Bank saw its Net Interest Income at Rs 6,909 crore in Q4FY24 as against Rs 6,103 crore seen in the same period last year. Its net interest margin (NIM) during the quarter rose to 5.28 per cent against 5.22 per cent in Q3 of FY24.

In its filings made with the exchanges, Kotak Mahindra Bank, which was recently barred by the Reserve Bank of India (RBI) for onboarding new customers online and asked to stop issuing credit cards, clocked 22 per cent growth in PAT for the fiscal ended March.  

The Kotak Mahindra Bank CASA ratio stood at 45.5 per cent while the Cash Deposit (CD) ratio came at 83.8 per cent and net non-performing assets (NNPA) were at 0.34 per cent. 

As per the Kotak Mahindra Bank, favourable tax credits in Q4FY24 was in the tune of  Rs 200 crore. As per the company statement, the Bank’s PAT for FY23 increased to Rs 10,939 crore from Rs  8,573 crore in FY22, up 28 per cent  YoY and for Q4FY23 stood at Rs  3,496 crore, up 26 per cent YoY from Rs  2,767 crore in Q4FY22.

Net Interest Income (NII) for FY23 increased to Rs  21,552 crore, from Rs  16,818 crore in FY22, up 28 per cent  YoY and for Q4FY23 increased to Rs  6,103 crore, from Rs 4,521 crore in Q4FY22, up 35 per cent  YoY. Net Interest Margin (NIM) was 5.33 per cent for FY23 and 5.75 per cent  for Q4FY23.

The company release said that the fees and services for FY23 increased to Rs  6,790 crore from Rs  5,413 crore in FY22, up 25 per cent YoY and for Q4FY23 increased to Rs 1,928 crore from Rs  1,575 crore in Q4FY22 , up 22 per cent YoY. “Operating profit for FY23 increased to Rs  14,848 crore from ₹ 12,051 crore, up 23 per cent YoY and for Q4FY23 was Rs 4,647 crore, up 39 per cent YoY, Q4FY22: Rs 3,340 crore,” said the statement. 

Kotak Mahindra Bank said that it has made a net customer addition in Q4FY23 of 2.2 million. Customers as at March 31, 2023 were 41.2 million. Notably, the customer base of Kotak Mahindra Bank stood at 32.7 million as on March 31, 2022.

The customer assets, which comprises Advances, including IBPC & BRDS, and Credit Substitutes, increased by 19 per cent  YoY to Rs 3,52,652 crore as on March 31, 2023 from Rs  2,95,273 crore as on March 31, 2022.

The Capital Adequacy Ratio of the bank, as of  March 31, 2023 was 21.8 per cent  and CET I ratio of 20.6 per cent. The Board of Directors of the Bank has recommended dividend of Rs  1.50 per equity share having face value of Rs  5, for the year ended March 31, 2023, subject to approval of shareholders, it said. 

No servicing impact by RBI order 

The RBI order that has barred Kotak Mahindra Bank from onboarding customers online, does not impact the servicing and cross-sell of products, Kotak Mahindra Bank said in the filings. However, this excludes new credit cards, to the existing customer base through all channels, it added.  

It said the onboarding of new customers through means other than online/ mobile banking channels was operating smoothly. 

In terms of the way forward and action plan, the bank said: “We are totally committed to working with all our regulators to achieve the required technology standards. Bank will step-up investments to fortify its IT systems. The focus is on accelerate execution of the comprehensive plan for core banking resilience,”

Kotak Mahindra Bank has said that it will demonstrate sustainable compliance to the Baseline Cyber Security framework for banks and continue to strengthen digital payment security controls.