Kotak Bank Q4 preview: Loan growth to aid net interest income, lower margins may hit profit

Kotak Bank Q4 preview

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Kotak Bank Q4 preview : Kotak Mahindra Bank’s NII is expected to increase by 10 percent YoY to Rs 6,690 in Q4FY24, while profit may slip by 6 percent YoY to Rs 3,283 crore

Kotak Bank Q4 preview : what analysts are expecting for Kotak Bank’s Q4 results. Here’s a breakdown of the key points:

  • Loan growth: Analysts predict a rise in loans given out by Kotak Bank, which should translate to higher net interest income (NII). NII is basically the difference between what the bank earns on loans and what it pays on deposits.
  • Lower margins: However, analysts also expect a decrease in net interest margins (NIMs). NIM is a measure of profitability on interest earned. This could be due to factors like rising interest rates.
  • Profit impact: The lower margins might dampen Kotak Bank’s overall profit for the quarter, even with the increase in NII. Kotak Bank Q4 preview

It’s important to remember these are just predictions. The actual results might be different when Kotak Bank announces them. Here are some resources you can check for further info: Kotak Bank Q4 preview

  • News articles about Kotak Mahindra Bank Q4 preview [Search “Kotak Mahindra Bank Q4 preview”]
  • Analyst reports on Kotak Bank’s financials (might require a subscription) Kotak Bank Q4 preview

Strong loan growth is likely to help Kotak Mahindra Bank clock double-digit rise in net interest income in the Q4 FY24, but higher cost of funds and shrinking margins may drag its net profit, said analysts. Kotak Bank Q4 preview

The private sector lender will announce its Q4 results on May 4. The stock was recently in focus after the Reserve Bank of India barred the lender from issuing new credit cards, citing eficiencies and non-compliance. Additionally, the sudden resignation of senior leader KVS Manian also shocked investors over its faltering talent pool. Kotak Bank Q4 preview

So far this year, Kotak Bank shares have crashed over 18 percent, underperforming four percent rise in the benchmark Nifty 50 index during the same period.

ALSO READ: Kotak Bank on a losing streak as analyst downgrades accelerate Kotak Bank Q4 preview

Lower margins may eat Kotak’s profit, but asset quality picture perfect

According to an average estimate of eight brokerages, Kotak Mahindra Bank’s NII is expected to increase by 10 percent year-on-year (YoY) to Rs 6,690 crore in Q4FY24 from Rs 2,186 crore in Q4FY23 amid strong credit offtake. Kotak Bank Q4 preview

However, the private sector lender’s profit is pegged to decline by six percent YoY to Rs 3,283 crore in Q4FY24 from Rs 3,496 crore a year-ago. Kotak Bank Q4 preview

ALSO READ: Are Kotak Mahindra Bank’s problems transitory?

The impact on profitability comes on the back of contracting margins as cost of funds rise across industry. Analysts at Prabhudas Lilladher forecasted Kotak Mahindra Bank’s net interest margins (NIMs) to shrink by up to 28 basis points (bps) YoY to 5.21 percent in Q4FY24 from 5.34 percent in the year-ago period. Kotak Bank Q4 preview

The lender’s asset quality is seen to remain in control, added Motilal Oswal analysts. Gross non-performing assets (NPAs) may slip to 1.69 percent in Q4FY24 from 1.78 percent in Q4FY23, whereas net NPAs may decline to 0.33 percent in Q4FY24 from 0.37 percent in the year-ago period. Kotak Bank Q4 preview

Following the release of Kotak’s Q4 scorecard, some of the top factors to watch out would be the management’s commentary on margins, growth trajectory on unsecured loan book, and observations on regulatory impact on digital banking business. Kotak Bank Q4 preview

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