Kotak Mahindra Bank saw rise in loans under moratorium but it isn't the worst hit
- 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.
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.
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.
|Bank||Loans under moratorium|
|Kotak Mahindra Bank||9.65%|
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.
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
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