Kotak Mahindra Bank on Thursday reported a 12% year-on-year (y-o-y) rise in standalone net profit for the quarter ended June at Rs 1,025 crore on the back of healthy net interest income (NII) and improved asset quality. NII, or the difference between interest earned and interest expended by a bank, rose 15% to Rs 2,583 crore for the quarter.
Private sector lender Kotak Mahindra Bank (KMB) is on course to have a customer base of 16 million by September, from the current level of 13 million, which also includes the bank’s 811 customers, managing director and CEO Uday Kotak wrote to the bank’s shareholders in its 2017-18 annual report. “On March 29, 2017, while launching 811, we had made a commitment to double our customer base in 18 months, that is, to about 16 million by September 2018,” he said.
Kotak Mahindra Bank’s Q4FY18 PAT at Rs 1,120 crore was marginally lower than our estimate as it took a one-time hit of Rs 82 crore on employee expenses and did not avail RBI dispensation on amortization of mark-to-market losses. Loan growth at 25% YoY gained momentum and management continues to guide for 20% YoY growth in FY19.
India’s benchmark equity index just managed to close in the green after swinging between gains and losses as weak sentiment in Asia offset the good cheer from strong auto sales in April.
The S&P BSE Sensex rose 0.1 per cent to 35,176.42 after falling as much as 0.3 per cent. The measure swung between gains and losses at least a dozen times. All but two of the 19 sector sub-indexes compiled by BSE fell, led by an index of metal stocks.
Kotak Mahindra Bank Market Capitalisation: In a major development in the stock market proceedings on Wednesday, India’s fourth-largest private sector lender Kotak Mahindra Bank market capitalisation surpassed that of ONGC to enter the top 10 club by market capitalisation in India. Shares of Uday Kotak-led Kotak Mahindra Bank was among the top gainers among the components of BSE Sensex since the morning trades on Wednesday.
The Mumbai-based Kotak Mahindra Bank led by Asia’s richest banker Uday Kotak became India’s second-largest bank by market capitalisation on Monday surpassing India’s largest bank by asset State Bank of India to grab the spot. Kotak Mahindra Bank is now behind the market capitalisation leader among all the banking scrips HDFC Bank which also features among the exhaustive club of Rs 5 lakh crore market capitalisation.
Following the curtailment of Axis Bank CEO Shikha Sharma’s term, many top market voices including global brokerage firm Nomura believe that its an opportune moment for Uday Kotak-run Kotak Mahindra Bank to takeover the private lender. “With a very short time left in the CEO’s term at Axis Bank, RBI’s pressure on Axis Bank’s management and with an asset quality clean-up exercise continuing, we believe this is the best opportunity for Kotak Bank to acquire or merge with Axis Bank,” Nomura said in its report.
The pummeling of bank stocks isn’t bad news for all banks. Kotak Mahindra Bank bucked the trend on Wednesday, with the stock ending in the green. In fact, the shares of the private lender advanced in three sessions of the last six when the Bank Nifty gave up over 6% of its value.
The private lender, which boasts higher market capitalisation than its gross advances, surpassed ICICI Bank in market value last week.
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