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.

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.


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%
HDFC Bank	9%
Axis Bank	9.7%
ICICI Bank	17.5%

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.


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