Kotak Bank reported a 16.4% fall in pre-tax profits to Rs.2435 crore due to elevated COVID related provision despite its net interest income or NII going up 16%. Net profit was just about down 4% at Rs.1853 crore for the Jun-20 quarter. Kotak Bank made COVID related provisions of Rs.667 crore in the quarter. NIM was down 22bps at 4.40%.

One thing that perhaps worried analysts was that the gross NPAs were up 45 bps at 2.70%, although net NPAs were relatively comfortable at 0.87%. The bank also reported slippages to the tune of Rs.796 crore. The bank still enjoys a comfortable capital adequacy ratio of 21.2%. The fall in profits appears to be more a case of too much conservatism.