Kotak Bank expected to post 20% rise in Q4 net profit

Kotak Mahindra Bank is likely to report a 20 percent rise in net profit for the fourth quarter ending March 2018, as per an analyst report.

The fourth-largest private lender is set to announce on Monday the fourth and last quarter results for the fiscal year 2017-18.

The January-to-March quarter net profit is estimated to be at Rs 1,168 crore, a rise of 19.6 percent from Rs 976.5 crore in the year ago period, said a report by Sharekhan brokerage.

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Net interest income (NII – difference between interest earned and expended) is expected to rise 18 percent at Rs 2,543.5 crore as against Rs 2,161 crore in the same quarter last year.

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An ICICI direct report added, "We expect continuance of the steady performance on both asset quality as well as earnings. Advances growth is expected to remain robust at 22 percent YoY, led by retail and small business segment. Hike in MCLR  (interest rates) may support margins (NIMs) at 4.2-4.3 percent...Post a fall in Gross NPA (non-performing asset) ratio in the last couple of quarters, we expect GNPA ratio to remain broadly stable at 2.3 percent."

The Uday Kotak-owned bank has been one of the strongest and growing banks in the industry with stable asset quality due to its retail focus, exposure to working capital loans, conservative provisioning method and sound capital strength. Analysts expect this trend to continue for the bank.

「Well-run private banks such as HDFC Bank, Kotak Bank and Yes Bank are expected to post faster than the system’s growth and gain market share from PSBs (public sector banks),」 the Sharekhan report said.

It has been among the leading banks and slated as 「Earnings Outperformers」 and the 「Preferred Picks」 by the brokerage firm.

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