Kotak Mahindra Bank saw rise in loans under moratorium but it isn't the worst hit

Kotak Mahindra Bank's share price plummets by 2% after earnings announcementBCCL
  • Kotak Mahindra Bank’s profit is down by 8% in the first quarter as compared to the same quarter last year.
  • In the last three months, the share of its total portfolio exposed to the moratorium has also gone up from 9.15% to 9.65%.
  • Kotak Mahindra Bank’s share price saw a sudden dip of 2% after earnings were announced despite being in the green all day.
Kotak Mahindra Bank’s profit dipped by over 8% this quarter as compared to last year and its asset quality seems to be worsening amid the coronavirus pandemic.

Kotak Mahindra Bank's profits over the last five quartersCompany filings/BI India

The bank has added ₹667 crore to its kitty to deal with COVID-19 related provisions as its gross non-performing asset (GNPA) ratio jumped 45 basis points year-on-year (YoY). The total provision for bad loans on account of the COVID-19 crisis now stands at ₹1,266 crore.

Kotak Mahindra Bank's GNPA and NNPA ratios over the last five quartersCompany filings/BI India


Its moratorium book — loans where repayments are on pause — has also risen from 9.15% during the first phase to 9.65% by June-end. But it is largely at par with three out of the top five banks. ICICI Bank has been the worst hit.

BankLoans under moratorium
Kotak Mahindra Bank9.65%
HDFC Bank9%
Axis Bank9.7%
ICICI Bank17.5%

The bank has the capital cushion it needs to weather a bad loan storm, if it were to arise. It raised ₹7,442 crore via qualified institutional placement (QIP). QIP is a tool used by listed companies to sell shares or other securities to qualified institutional buyers such as mutual funds.


However, shareholders aren’t excited. The stock fell 2% after the earnings were announced in the face of worsening asset quality.

Kotak Mahindra Bank's share price over the last one monthBSE/BI India

Billionaire Uday Kotak to sell 2.83% stake worth over ₹6,800 crore in Kotak Mahindra Bank

Uday Kotak says Kotak Mahindra Bank 'needs to be clear on lending' as profits dip by 10% in Q4