Mumbai, Oct 21 (PTI) Kotak Mahindra Bank's consolidated net profit for the September quarter increased by 23.56 per cent to Rs 4,422.86 crore, helped by core income.

The city-based lender also said that the Reserve Bank has approved Ashok Vaswani, an external candidate, to lead it and succeed its founder Uday Kotak as the managing director and chief executive officer.

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On a standalone basis, the bank's September quarter net profit grew to Rs 3,191 crore as against the year-ago period's Rs 2,581 crore.

Its core net interest income rose 20.49 per cent to Rs 6,297 crore on a 21 per cent growth in advances and a widening of net interest margins to 5.22 per cent.

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The other income came at Rs 2,314 crore as against Rs 1,832 crore in the year-ago period.

At a time when the regulator is expressing concerns about the unsecured lending in the system, the bank reported a jump in the share of such loans in its book to over 11 per cent from 8.7 per cent in the year-ago period.

Its interim managing director and chief executive officer Dipak Gupta said the bank is "watchful" on the portfolio but will increase its contribution to the overall book to low to mid-teens.

He also acknowledged that the delinquencies in such portfolios have gone up when compared to the last year, but was quick to add that the same is lower than the pre-Covid period.

Gupta said there is over-leveraging of borrowers wherein a single borrower's loan borrowings are higher, but the issues are not as high as to make the bank start worrying about it.

The bank witnessed an increase in the fresh slippages to over Rs 1,300 crore as against Rs 1,200 crore in the quarter-ago period, its chief financial officer Jaimin Bhatt said, adding that some of the slippages did come from the unsecured loans.

The gross non-performing assets ratio improved to 1.72 per cent as against 2.08 per cent in the year-ago period and 1.77 per cent in the quarter-ago period.

Meanwhile, the bank announced that the RBI has approved the name of external candidate Vaswani to be the MD and CEO after the surprise resignation of Uday Kotak in September, four months ahead of his scheduled departure.

Vaswani, who is heading an artificial intelligence-based analytics company, has had a long stint in banking and worked in leadership positions with Citigroup and Barclays. The appointment is for three years and he will be joining Kotak sometime in December, Gupta said.

Gupta, who parried a specific question on whether he was a top choice for the board, said that Vaswani's global experience will come in handy at a time when banking is undergoing change.

He also said that the appointment is in line with earlier moves by the bank to appoint people of Indian origin who have developed expertise in areas like digital, technology and customer interface.

Uday Kotak, who has a 26 per cent stake in the bank, will continue to be on the board as a non-executive member. His son Jay Kotak is working in the bank at present, and the father had recently made it clear that Jay may grow in the bank on merit.

Kotak Mahindra Bank's overall capital adequacy had stood at 20.03 per cent as of September 30, 2023.

Among the subsidiaries, Kotak Mahindra Prime saw its net come down to Rs 208 crore from Rs 218 crore, Kotak Mahindra Investments' net increased to Rs 126 crore from Rs 102 crore, while Kotak Securities saw the same rising to Rs 324 crore from Rs 219 crore, its life insurance arm had its net profit jump to Rs 247 crore from Rs 193 crore.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)