Kotak Mahindra Bank shares surge over 4%; stock top NIFTY50 gainer

The private sector lender will share its September quarter results (Q2 FY25) on October 19. 

Kotak Bank reported a 79% jump in its consolidated net profit for the June 2024 quarter (Q1 FY25) to ₹7,448 crore compared to the year-ago period, majorly helped by a stake sale in its general insurance arm and the performance of subsidiaries.

On a standalone basis, the private sector lender's net profit grew by 2% to ₹3,520 crore, and the management conceded that the business restrictions imposed by the RBI due to shortcomings on the technology front had an impact.

"From the technology perspective, we have made significant progress during the quarter. In consultation with the RBI, we put together a comprehensive plan to fix all outstanding issues," chief executive and managing director Ashok Vaswani told reporters, adding that the bank is in constant communication with the RBI.

The credit card business has also suffered because of the RBI restrictions, and as the denominator goes down, the asset quality issues have surfaced in a starker way, the bank had said.

For the June quarter, its core net interest income (NII) grew 10% year-on-year to ₹6,842 crore but was down when compared with the ₹6,909 crore logged in the quarter-ago period.

Fresh slippages came in at ₹1,358 crore, and the gross non-performing assets ratio was stable at 1.39% for the bank.

The bank's overall capital adequacy stood at 22.8%, and the core Tier-I buffers were at 21.9% at the end of June.

In the June quarter, Zurich Insurance Group completed the deal to take a 70% stake in Kotak General Insurance. The transaction has resulted in an increase in the consolidated PAT by ₹3,013 crore and standalone PAT by ₹2,730 crore.

Shares of Kotak Mahindra Bank have remained quite static over the past five years. In a year, the stock has risen merely 7%, while during the past five years, the stock has gained just 18%.