Kotak Mahindra Bank, the third largest private sector lender in the country by market capitalisation, posted a profit of Rs 2,184.5 crore in the quarter ended in September, recording a growth of 26.7 percent year-on-year, backed by lower provisions. Increased operating profit before provision, NII and other profits also boosted profitability.
In the July-September quarter of 2020, net interest income-the difference between interest received and interest spent-rose by 16.8 percent to Rs 3,913.2 crore compared to the corresponding previous fiscal period.
Loan book decreased 4% every year to Rs 2.04 lakh crore and net interest margin contracted from 4.61 percent YoY to 4.52 percent, Kotak Mahindra Bank said. Compared to the year-ago period, provisions and contingencies decreased 9.6 percent to Rs 368.59 crore, while the sequential decrease was 61.7 percent
Overall, concerns about asset quality weighed on the banking sector. Therefore, during the September quarter and financial year 2020-21, the stock did not see any significant movement, dropping 6.8 percent and rising 6.7 percent respectively, while it gained 26 percent from the lows of March.
Mergers of Kotak Mahindra Bank
The merger was completed between ING Vysya Bank (Vysya) and Kotak Mahindra Bank (Kotak). As one of India’s leading privately owned banks, the merged entity has a strengthened role, with a broader geographical spread and enhanced experience across consumer segments and product categories.
ING will continue to serve its Indian customers outside India and, via the larger combined network, will support its global customers operating in India. Active dialogue has also been developed between ING and Kotak with regard to additional areas of cooperation across a wide range of items.
On 20 November 2014, Vysya and Kotak declared (PDF, 349 KB) their intention to merge their respective businesses. This transaction was authorised on 31 March 2015 by the Reserve Bank of India with effect from 1 April 2015.
With a 42.7 percent shareholding at the time of the announcement of the merger, ING was the largest shareholder in Vysya. Under the terms of the deal, as announced on 20 November 2014, for each Vysya share, Vysya shareholders will receive 0,725 Kotak shares.
In the merged group, which will operate under the Kotak name, ING will hold a 6.5% interest. The keeping of ING in the merged business will be subject to a lock-up period of 1 year from the closing of the deal.