Kotak Mahindra Bank - Q1FY14 Result Update - GEPL Capital

Asset quality witnessed some stress during the quarter wherein GNPLs rose from 1.55% in Q4FY13 to 1.95% in Q1FY14 (increase of INR2.4bn in absolute term to INR10bn). This was attributable to one chunky corporate account of INR1.5bn recognized as NPL— which otherwise would have been classified as restructuring as it is referred to CDR—and higher stress in CV/CE segment. It also acquired stress portfolio of INR230mn in Q1FY14 which was treated as NPL and entirely written-off. Credit cost came in higher at ~90bps (40bps in FY13) and loan growth settled lower at ~20%. Restructured portfolio has come off from INR78mn to INR63mn.

Core fee income grew 40% Y-o-Y (flat Q-o-Q); however, non-interest income almost doubled Y-o-Y led by treasury and stressed asset recoveries. Mortgages breakup is as follows 60% home loan and 40% LAP. Loan growth was 19% Y-o-Y, with retail being the primary driver, at 31% Y-o-Y.

Source : Equity Bulls

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