MUMBAI: Private sector lender Kotak Mahindra BankBSE 1.07 % on Thursday reported a 16% year-on-year rise in its consolidated net profit for the second quarter ended September 30, on the back of growth in consumer lending, agricultural credit and other income.
During the three-month period, profit after tax stood at 583 crore compared with 502 crore a year back. Other income rose more than 11% to 511 crore.
"Unless investor confidence improves, I cannot see any significant change in the business environment," said Dipak Gupta, joint managing director, Kotak Mahindra Bank.
"For revival, stability is needed in GDP growth, interest rate and inflation. We are very cautious while lending. We are going slow on lending for commercial vehicles and construction equipment. It is important to be a consistent player irrespective of any market competition," said Gupta.
The new-generation bank's net interest margin - a measure of profitability - stood at 4.9% compared with 4.6% in the corresponding quarter of the previous year.
Among all other subsidiaries, the brokerage business did not grow with net profit at 40 crore. Kotak Mahindra Prime reported 10% growth in its net profit to 125 crore.
The bank's standalone net profit rose at a higher pace of 26% y-o-y to 353 crore. It expanded its loans by 11% to 50,609 crore from 45,443 crore a year back. The credit uptick is well below the Reserve Bank of India's projected industry credit at 15%. This suggests that the lender with a relatively smaller book size too couldn't escape the effect of the economic slowdown.