India's Kotak Mahindra Bank reported on Saturday a 10 per cent increase in quarterly profit on due to increased lending, despite a significant rise in provisions for potential bad loans. The Mumbai-based private lender's standalone net profit, which exclude earnings from its subsidiaries, increased to 33.05 billion rupees ($382 million) in the three months ending in December, matching an LSEG consensus estimate. Its net interest income, which is the amount a bank earns on loans minus what it pays out on deposits, increased by 10 per cent to 71.96 billion rupees. Although the net interest margin decreased to 4.93 per cent from 5.22 per cent compared to the previous year, it was slightly higher than the 4.91 per cent reported in the previous quarter. Kotak's loans increased 16 per cent in value in the December quarter, outpacing a 15 per cent rise in deposits. This growth occurred despite restrictions imposed by the central bank since April 2024, limiting Kotak from acquiring new digital clients and issuing credit cards due to IT infrastructure deficiencies. Provisions and contingencies also surged 37 per cent to 7.94 billion rupees. The gross non-performing assets ratio increased slightly to 1.50 per cent in December from 1.49 per cent in September. Indian banks experienced deteriorating asset quality in the microfinance and unsecured segments from April to October last year. Attribution: Reuters Subediting: Y.Yasser
