Kotak Bank Q4 net up 50% to Rs 34.7 cr

Kotak Mahindra Bank today reported 50 per cent year-on-year rise in net profit in the fourth quarter ended March 2006 to Rs 34.7 crore, on higher operating profit from corporate banking.

Operating profit from the corporate banking division was up almost 13 times to Rs 12.25 crore from Rs 96.42 lakh a year earlier.

For the whole of 2005-06, net profit was up 39.27 per cent to Rs 118.23 crore from Rs 84.89 crore a year earlier. Total income for the year increased to Rs 936.95 crore from Rs 552.73 crore a year earlier.

The net interest margin of the private sector bank, which completed three years as a commercial bank, was at a high of 4.4 per cent.

The higher net interest margin protects the bank from being hit badly in a cyclical downturn, said executive vice-chairman and managing director, Uday Kotak.

Kotak Bank shares closed 0.39 per cent higher in a bearish market. The bank's shares ended at Rs 363.95 per share, after a high of Rs 384.90 and a low of Rs 332.50, on the BSE.

The bank's capital adequacy ratio at the end of March 31, 2006 was 11.27 per cent, which subsequently increased to about 15 per cent following a GDR issue.

The Kotak bank group would now consolidate their corporate and investment banking businesses following the acquisition of 26 per cent interest owned by Goldman Sachs in two of the subsidiaries.

Kotak said: "Kotak Mahindra Capital Company and Kotak Mahindra Securities have about Rs 1,000 crore of capital with very little leverage. The bank will explore how to use this capital subject to statutory and tax issues."

The bank's advances portfolio grew by 58 per cent to Rs 6,348.50 crore as on March 31, 2006, while deposits increased by 53 per cent to Rs 6,565.9 crore during the year.

"We plan to grow at a 30 per cent plus rate in 2006-07," the executive vice-chairman said.

Total revenues during January-March 2006 increased to Rs 293.44 crore from Rs 171.53 crore a year earlier. Net interest income increased by 61 per cent to Rs 108.2 crore during the quarter from Rs 67.3 crore a year earlier.

On a consolidated basis, Kotak Bank group's net profit in the fourth quarter of 2005-06 was Rs 130.8 crore, up 104 per cent from Rs 64.3 crore a year earlier, excluding the profit on sale of 3.2 per cent effective economic interest in Hutchison Essar Ltd.

For 2005-06, Kotak Bank group's net profit was Rs 729.7 crore, including Rs 387.3 crore profit on sale of Hutchison stake. The net profit in 2004-05 was Rs 170.9 crore.