Kotak Mahindra Bank is set to release its second-quarter results on Saturday. Here's what you need to know:
Net Profit Forecast
According to a poll of analysts by FactSet, Kotak Mahindra is expected to report a 23% increase in net profit to 31.68 billion rupees ($380.8 million) for the quarter ended September 30 on an unconsolidated basis. This compares to a net profit of INR 25.81 billion in the same period last year.
Key Factors to Watch
Loan Growth
Customer assets, primarily advances, grew 19% from the previous year to INR 4.058 trillion as of the end of June. As the Indian economy continues to steadily grow, investors are paying close attention to the rate of lending growth.
Asset Quality
Kotak Mahindra's ratio of gross nonperforming assets to gross advances improved from 2.27% to 1.75% in the first quarter. However, the bank made provisions of INR 4.14 billion in the same period, up from INR 88.0 million the previous year. Investors are looking for any signs of deterioration in loan quality due to recent increases in interest rates.
Segment Performance
First-quarter profit from Kotak Mahindra's retail banking division doubled from the previous year to INR 11.38 billion, while profit from its corporate and wholesale banking division increased by 38% to INR 19.28 billion. Investors are closely monitoring the performance of these key segments.
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