KOTAK MAHINDRA BANK LIMITED (CONSOLIDATED)

Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED SEPTEMBER 2007

Rs million

Sr

No

Particulars

Quarter Ended

Half Year Ended

Year Ended

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Mar-07
(Audited)

1

Interest earned (a+b+c+d)

8,385.14

4,337.35

15,518.22

8,313.46

19,817.26
 

(a) Interest/discount on advances/bills

6,002.13

3,298.01

11,208.03

6,276.79

14,811.71
 

(b) Income on investments (see Note 7)

1,994.72

867.60

3,565.38

1,639.38

4,055.21
 

(c) Interest on balances with RBI & other banks

232.57

121.53

446.55

199.70

489.41
 

(d) Others

155.72

50.21

298.26

197.59

460.93

2

Other income  (see Notes 2, 5 and 7)

9,732.71

4,697.63

16,523.45

8,487.36

23,153.93

3

Total income (1+2)

18,117.85

9,034.98

32,041.67

16,800.82

42,971.19

4

Interest expended

4,408.62

2,136.87

8,424.36

4,012.14

9,764.27

5

Operating expenses (a+b)

9,738.95

5,357.42

17,273.90

9,268.12

23,873.50
 

(a) Payments to and Provisions for employees

2,848.07

1,447.30

5,274.96

2,992.41

6,880.85
 

(b) Other operating expenses (see Note 3 and 5)

6,890.88

3,910.12

11,998.94

6,275.71

16,992.65

6

Total expenditure (4+5) (excluding provisions and contingencies)

14,147.57

7,494.29

25,698.26

13,280.26

33,637.77
             

7

Operating Profit before Provisions and Contingencies (3-6)

3,970.28

1,540.69

6,343.41

3,520.56

9,333.42

8

Provisions (other than tax) and Contingencies (see Note 1)

519.55

207.25

871.05

435.00

1,546.50

9

Exceptional Items

-

-

-

-

-

10

Profit from Ordinary Activities before tax (7-8-9)

3,450.73

1,333.44

5,472.36

3,085.56

7,786.92

11

Tax expense (see Note 6)

1,158.17

484.32

1,818.02

1,112.29

2,542.12

12

Profit from Ordinary activities after tax before Minority Interest

(10 – 11)

2,292.56

849.12

3,654.34

1,973.27

5,244.80

13

Extraordinary items (net of tax expense)

-

-

-

-

-

14

Profit from Ordinary activities after tax before Minority Interest

(12 – 13)

2,292.56

849.12

3,654.34

1,973.27

5,244.80

15

Less: Share of Minority Interest

(73.76)

(43.96)

(137.88)

78.64

6.64

16

Add: Share in Profit of associates

48.23

45.93

81.72

88.72

144.26

17

Consolidated Profit after tax attributable to the Group            (14-15+16)

2,414.55

939.01

3,873.94

1,983.35

5,382.42

17

Paid Up Equity Capital - (Face Value of Rs. 10 per share)

3,269.50

3,250.46

3,269.50

3,250.46

3,261.56

18

Group Reserves (excluding Minority Interest)

        

29,068.04

19

Minority Interest

        

305.32

20

Analytical Ratios

          
 

(i) Earnings per Share (before and after extraordinary items)

          
 

(a) Basic  (not annualized) Rs.

7.39

2.89

11.87

6.15

16.60
 

(b) Diluted (not annualized) Rs.

7.30

2.86

11.73

6.08

16.47
 

(ii) NPA Ratios

          
 

(a) Gross NPA

4,524.36

988.51

4,524.36

988.51

3,772.32
 

(b) Net NPA

3,212.73

523.45

3,212.73

523.45

2,968.61
 

(c) % of Gross NPA/ Gross Advances

2.42

0.82

2.42

0.82

2.41
 

(d) % of Net NPA/ Net Advances

1.73

0.43

1.73

0.43

1.91
 

(e) % of Gross NPA/ Gross Advances (excluding NPAs acquired from other banks/ NBFCs)

0.78

0.56

0.78

0.56

0.46
 

(f) % of Net NPA/ Net Advances (excluding NPAs acquired from other banks/ NBFCs)

0.33

0.20

0.33

0.20

0.17
 

(iii) Return on Assets (average) (not annualised)

0.68

0.48

1.15

1.03

2.31

NOTES:

1. Provisions and contingencies are net of recoveries made against accounts which have been written off as bad in the previous year/s.

2. Details of other income forming part of the Consolidated unaudited results are as follows:

Rs million

Particulars

Quarter Ended

Half Year Ended

Year Ended

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Mar-07
(Audited)

Commission, Fees, Exchange and brokerage

4,577.06

1,926.32

7,416.55

4,403.88

10,562.40

Premium on insurance business

2,551.72

1,616.50

4,539.24

2,830.38

9,504.61

Profit on sale of investments incl. revaluation (insurance business)

1,711.16

661.86

2,757.02

274.94

553.30

Profit on sale of investments incl. revaluation (other than insurance)

884.77

175.88

1,441.15

347.80

1,050.81

Others

8.00

317.07

369.49

630.36

1,482.81

Total – Other income

9,732.71

4,697.63

16,523.45

8,487.36

23,153.93

3. Details of other expenditure forming part of Consolidated unaudited results are as follows:

Rs million

Particulars

Quarter Ended

Half Year Ended

Year Ended

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Mar-07
(Audited)

Policy holders’ reserves, surrender expense and claims

3,687.47

1,934.77

6,337.50

2,554.76

8,101.95

Brokerage

507.91

392.00

961.95

724.76

1,757.96

Depreciation

229.82

176.04

436.12

341.86

736.84

Rent, taxes and lighting

358.33

196.22

639.28

374.86

821.56

Others

2,107.35

1,211.09

3,624.09

2,279.47

5,574.34

Total – Other operating expenses

6,890.88

3,910.12

11,998.94

6,275.71

16,992.65

4. The consolidated financial results are prepared in accordance with Accounting Standard – 21, “Consolidated Financial Statements “ and ( AS ) -23 “ Accounting for investment in associates in consolidated financial statement “ issued by The Institute of Chartered Accountants of India.

5. Other income in the consolidated results for the reporting periods is net of sub-brokerage paid in the broking subsidiary amounting to Rs. 390.42 million for the quarter ended 30th September, 2007 and for half year ended 30th September, 2007 Rs. 514.53 million (for the quarter ended 30th September, 2006 Rs. 108.62 million; half year ended 30th September, 2006 Rs. 259.85 million and for the year ended 31st March, 2007 Rs. 583.46 million).

6. Provision for taxes (net of deferred tax) for the quarter ended 30th September, 2007, includes Fringe Benefit Tax provision amounting to Rs. 30.98 million and for half year ended 30th September, 2007 Rs. 56.79 million (for the quarter ended 30th September, 2006 Rs. 16.45 million and half year ended 30th September, 2006 Rs. 37.27 million and for the year ended 31st March, 2007 Rs. 84.60 million).

7. The Reserve Bank of India (RBI) issued a clarifications dated 11th July, 2007 requiring banks to reflect amortisation of premia on debt securities under interest income from investments. This was hitherto classified under “Other Income”. Accordingly the Group has reclassified the same for the quarter and half year ended 30th September, 2007 and all previous periods wherever necessary. On account of this reclassification the interest income is lower by Rs. 59.86 million for the quarter ended 30th September, 2007 and Rs. 150.98 million for the half year ended 30th September, 2007 (Rs.102.92 million for the quarter ended 30th September, 2006 and Rs. 198.70 million for half year ended 30th September, 2006 and Rs. 420.56 million for the year ended 31st March, 2007).

8. Figures for the previous period/ year have been regrouped wherever necessary to conform to current period’s presentation.

9 The above results were taken on record at the Audit Committee meeting and at the meeting of the Board of Directors held on 26th October, 2007.

KOTAK MAHINDRA BANK LIMITED (STANDALONE)

Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED SEPTEMBER 2007

Rs million

Sr.

No.

Particulars

Quarter Ended

Half Year Ended

Year ended

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Mar-07
(Audited)

1

Interest earned (a)+(b)+(c)+(d)

5,918.16

2,952.29

10,890.44

5,374.61

13,191.05

 

(a) Interest/ discount on advances/ bills

4,216.26

2,299.11

7,866.20

4,179.62

10,037.87

 

(b) Income on investments

1,604.90

574.12

2,853.93

1,078.56

2,808.36

 

(c) Interest on balances with RBI & other banks

76.19

76.24

114.21

110.63

331.22

 

(d) Others

20.81

2.82

56.10

5.80

13.60

2

Other Income

1,223.48

624.11

2,195.72

1,266.98

3,186.54

3

Total Income (1+2)

7,141.64

3,576.40

13,086.16

6,641.59

16,377.59

4

Interest Expended

3,084.18

1,538.53

6,014.61

2,846.18

6,992.40

5

Operating Expenses (i)+(ii)

2,593.34

1,350.73

4,653.11

2,589.73

6,127.07

 

(i) Employees cost

1,248.33

601.79

2,326.07

1,182.67

2,696.97

 

(ii) Other Operating expenses

1,345.01

748.94

2,327.04

1,407.06

3,430.10

6

Total expenditure (4+5) excluding provisions and contingencies

5,677.52

2,889.26

10,667.72

5,435.91

13,119.47

7

Operating Profit before provisions and contingencies (3-6)

1,464.12

687.14

2,418.44

1,205.68

3,258.12

8

Provisions (other than tax) & Contingencies

381.41

174.33

668.95

321.32

1,225.66

9

Exceptional Items

-

-

-

-

-

10

Profit / Loss from Ordinary Activities before tax (7-8-9)

1,082.71

512.81

1,749.49

884.36

2,032.46

11

Tax Expense

328.90

164.80

518.90

297.30

618.80

12

Net Profit / Loss from Ordinary Activities after tax (10-11)

753.81

348.01

1,230.59

587.06

1,413.66

13

Extraordinary items (net of tax expense)

-

-

-

-

-

14

Net Profit / Loss for the Period (12-13)

753.81

348.01

1,230.59

587.06

1,413.66

KOTAK MAHINDRA BANK LIMITED (STANDALONE)

Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED SEPTEMBER 2007

Rs million

Sr.

No.

Particulars

Quarter Ended

Half Year Ended

Year ended

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Mar-07
(Audited)

15

Paid Up Equity Capital - (Face Value Rs. 10 per share)

                3,269.50

               3,250.46

                  3,269.50

               3,250.46

       3,261.56

16

Reserves excluding revaluation reserves

        

     13,073.43

17

Analytical Ratios

          
 

(i) Percentage of Shares held by Government of India

Nil

Nil

Nil

Nil

Nil
 

(ii) Capital Adequacy Ratio

10.94%

12.38%

10.94%

12.38%

13.46%
 

(iii) Earnings Per Share (EPS) for the period / year (before and after extraordinary items)

          
 

- Basic

2.31

1.07

3.77

1.82

4.36

- Diluted

2.28

             1.06

3.73

1.80

          4.33

 

(iv) NPA Ratios

          
 

a) Gross Non-performing assets

                  3,497.56

                   835.43

                   3,497.56

                   835.43

        2,821.29

 

b) Net Non-performing assets

                  2,377.97

                   445.57

                   2,377.97

                   445.57

        2,168.03

 

c) % of Gross NPA to Gross Advances (including  NPAs acquired from other banks and NBFCs)

                        2.70

                       0.99

                          2.70

                       0.99

               2.57

 

d) % of Gross NPA to Gross Advances (excluding NPAs acquired from other banks and NBFCs)

0.96

0.63

0.96

0.63

0.52
 

d) % of Net NPA to net Advances  (including  NPAs acquired from other banks and NBFCs)

            1.85

              0.53

              1.85

            0.53

1.98
 

e) % of Net NPA to net Advances ( excluding  NPAs acquired from other banks and NBFCs)

0.39

0.20

0.39

0.20

0.18
 

f) Return on Assets (average)-Not Annualized

0.29%

0.26%

0.52%

0.46%

0.94%
             

18

Public Shareholding

         
 

(i) No. of shares

145,806,110

143,760,048

145,806,110

143,760,048

144,851,266

 

(ii) % of shareholding

44.60%

44.23%

44.60%

44.23%

44.41%

KOTAK MAHINDRA BANK LIMITED (STANDALONE)

Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021

SEGMENT RESULTS

Rs million

Sr.

No

 Particulars

 Quarter Ended

 Half Year Ended

 Year ended

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Sep-07
(Unaudited)

Sep-06
(Unaudited)

Mar-07
(Audited)

 1

 Segment Revenue 

         
 

 Lending 

    3,789.98

      1,964.74

       7,092.85

      3,588.75

      9,164.40

 

 Corporate Banking

      1,730.19

         807.46

       2,952.70

       1,640.57

      3,741.87

 

 Treasury and Investments

      1,953.15

         992.46

       3,885.90

       1,644.45

      4,084.85

 

 Retail Liabilities

      1,562.29

          743.03

      2,812.64

      1,479.98

      3,621.71

 

 Venture Fund Management

            54.98

            50.69

            91.17

            94.88

         178.37

 

 Total 

       9,090.59

      4,558.38

    16,835.26

      8,448.63

    20,791.20

 

 Less: Inter segment revenue

     1,957.41

        981.98

     3,778.34

     1,807.04

     4,413.87

 

 Add: Unallocable revenue

           8.46

                 -  

           29.24

                  -  

            0.26

 

 Total Revenue

      7,141.64

      3,576.40

    13,086.16

      6,641.59

    16,377.59

  2

 Segment Results 

         
 

 Lending 

       602.45

         297.97

      1,035.69

         456.61

     1,124.05

 

 Corporate Banking

        643.04

        202.65

        953.31

       396.88

     1,016.54

 

 Treasury and Investments

    263.13

       87.21

      540.92

       109.99

        236.05

 

 Retail Liabilities

      (451.61)

        (93.98)

      (838.83)

       (121.51)

      (423.26)
 

 Venture Fund Management

          17.24

          18.96

          29.16

          42.39

          78.82

 

 Total 

     1,074.25

        512.81

     1,720.25

         884.36

     2,032.20

 

 Add: Unallocable revenue 

          8.46

                  -  

        29.24

                  -  

            0.26

 

 Profit Before Tax

      1,082.71

         512.81

      1,749.49

         884.36

     2,032.46

 3

 Segment Assets 

         
 

 Lending 

102,226.48

    64,769.59

  102,226.48

    64,769.59

    86,884.75

 

 Corporate Banking

  113,639.22

    31,838.28

  113,639.22

    31,838.28

    44,333.17

 

 Treasury and Investments

  142,911.06

    56,768.01

  142,911.06

    56,768.01

    93,213.33

 

 Retail Liabilities

   73,437.05

    37,026.14

    73,437.05

    37,026.14

    48,816.22

 

 Venture Fund Management

          27.84

                  -  

         27.84

                  -  

          77.19

 

 Total 

  432,241.65

   190,402.02

   432,241.65

   190,402.02

  273,324.66

 

 Less: Inter segment assets 

155,845.22

    55,185.52

 155,845.22

    55,185.52

   74,873.91

 

 Total Assets

  276,396.43

   135,216.50

   276,396.43

   135,216.50

  198,450.75

 4

 Segment Liabilities 

         
 

 Lending 

    90,718.89

    58,398.00

    90,718.89

    58,398.00

    78,418.58

 

 Corporate Banking

  109,685.90

    29,784.18

  109,685.90

    29,784.18

   40,956.63

 

 Treasury and Investments

  140,353.93

    51,746.98

  140,353.93

    51,746.98

    88,492.59

 

 Retail Liabilities

 74,275.88

    37,178.48

    74,275.88

    37,178.48

    49,264.42

 

 Venture Fund Management

                  -  

                  -  

                  -  

                  -  

            6.32

 

 Total 

  415,034.60

   177,107.64

   415,034.60

   177,107.64

  257,138.54

 

 Less: Inter segment liabilities

  155,845.22

    55,185.52

  155,845.22

    55,185.52

    74,873.91

 

 Total Liabilities

   259,189.38

   121,922.12

  259,189.38

   121,922.12

  182,264.63

 5

 Unallocated Assets/(Liabilities) - net

         519.16

         220.59

519.16

         220.59

        148.87


Note on segment information
The reportable primary segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) issued by the Institute of Chartered Accountants of India (ICAI).

Notes

1 During the quarter, the Bank has granted 4,925,050 equity shares to employees of the Bank and its subsidiaries under employee stock options scheme and 521,937 options were exercised by the employees. The stock options outstanding as at 30th September, 2007 are 10,817,405.

2  During the quarter, the Bank has subscribed to the rights issue of equity shares of its subsidiary, Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life) amounting to Rs 259.20 million. The total investment made by the Bank in Kotak Life as on 30th September, 2007 is Rs 2,073.56 million.

3  Provision for taxes (net of deferred tax) for the half year ended 30th September, 2007 includes fringe benefit tax provision amounting to Rs. 23.20 millions (Rs. 12.90 millions for the half year ended 30th September, 2006).

4. Status of shareholder complaints received during the quarter ended 30th September, 2007:7:

Total complaints pending as at 30th June 2007

NIL

Total complaints received during the quarter ended 30th September 2007

46

Total complaints resolved during the quarter ended 30th September 2007

46

Total complaints pending as at 30th September 2007

NIL

5  Provisions and contingencies are net of recoveries made against accounts which have been written off as bad in the previous period/year.

6   The Reserve Bank of India (RBI) issued a clarifications dated 11th July, 2007 requiring banks to reflect amortization of premia on investments in the Held to Maturity (HTM) category under interest income from investments. This was hitherto classified under “Other Income”. Accordingly the Bank has reclassified the same for the quarter and half year ended 30th September, 2007 and all previous periods wherever necessary. On account of the said reclassification, net interest income is now lower by Rs 60.48 million for the quarter ended 30th September 2007 (corresponding previous quarter Rs 89.76 million) and Rs 139.06 million for half year ended 30th September 2007 (corresponding previous half year Rs 168.80 million) and Rs 350.0 million for the year ended 31st March, 2007.

7   The Bank raised Rs. 16,150.0 million on 15th October, 2007 consequent to the issue and allotment of 17,000,000 equity shares to Qualified Institutional Buyers at Rs.950/- per share. The aforesaid issue was in accordance with Chapter XIII-A of the SEBI DIP guidelines.

8   With effect from 1st October, 2007, the investment management function in the Bank for Venture Capital has been assigned to Kotak Investment Advisors Limited (KIAL) (erstwhile Kotak Mahindra Securities Limited) which is 100% beneficially owned by Bank

9   Figures for the previous period/ year have been regrouped wherever necessary to conform to current period’s presentation.

10.These results for the quarter ended 30th September, 2007, have been subjected to a "Limited Review" by the Statutory Auditors of the Bank.

11. The above results were taken on record at the Audit Committee meeting and at the meeting of the Board of Directors held on 26th October, 2007.

 

By order of the Board of Directors
 

For Kotak Mahindra Bank Limited
   
   
 

Dipak Gupta

Mumbai, 26th October, 2007

Executive Director