Private sector lender Kotak Mahindra Bank on Monday reported 8.5 per cent decline in its standalone net profit to Rs 1,244.45 crore in the first quarter ended June 30. The bank had posted a net profit of Rs 1,360.20 crore in the year-ago period. However, the net profit remained nearly flat when compared sequentially from Rs 1,266.60 crore in the March quarter.

Total income (standalone) too declined to Rs 7,685.40 crore in the April-June quarter of 2020-21 over Rs 7,944.61 crore in the same period of 2019-20, Kotak Mahindra Bank said in a regulatory filing.

The bank's provisioning for bad loans and contingencies were raised substantially to Rs 962.01 crore for the quarter ended June 2020 against Rs 316.76 crore a year ago.

However, it was down quarter-on-quarter from Rs 1,047.47 crore provisioning and contingencies for three months ended March 2020.

On the asset quality front, the lender witnessed a slight deterioration as the gross non-performing assets (NPAs) rose to 2.70 per cent of the gross advances as on June 30, 2020 from 2.19 per cent in the year-ago period. In absolute value, the gross NPAs or bad loans amounted to Rs 5,619.33 crore, higher than Rs 4,613.52 crore a year ago.

Net NPAs increased to 0.87 per cent (Rs 1,777.10 crore) from 0.73 per cent (Rs 1,524.38 crore). On a consolidated basis, the bank reported 4.1 per cent fall in net profit at Rs 1,852.59 crore in the first quarter compared with Rs 1,932.21 crore in the year-ago period.

Tech Mahindra

Tech Mahindra on Monday reported a 1.35 per cent rise in June quarter net profit at Rs 972.3 crore against Rs 959.3 crore and said it is targeting to emerge stronger by the end of calendar year 2020.

Compared with the preceding March quarter, the net profit grew over 20 per cent, but the management was quick to point that there were impairments on the back of provisions made for Covid-19.

Revenues rose to Rs 9,106 crore, up 5.23 per cent from a year ago but down 4 per cent sequentially.

The continued slowdown in economic activities has impacted lending, fee income generation from the sale of third party products or the usage of debit and credit cards, collection efficiency, the bank said on the pandemic.

This slowdown may impact customer defaults and consequently increase in provisions at the group level. There is a high level of uncertainty regarding the time required for life and business to get normal, the bank said.

“The extent to which Covid-19 pandemic will impact the bank’s operations and financial results is dependent on the future developments, which are highly uncertain,” it said.

The stock of Kotak Mahindra Bank trading at Rs 1,322.30 apiece on BSE, down 2.04 per cent from the previous close, including among many other things, any new information concerning the severity of the pandemic and any action to contain its spread or mitigate its impact