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 30, 2008
Rs lakhs
Sr No Particulars Quarter Ended Half Year Ended Year Ended
Sep-08 (Unaudited) Sep-07 (Unaudited) Sep-08 (Unaudited) Sep-07 (Unaudited) Mar-08
(Audited)
1 Interest earned (a+b+c+d) 109,289.79 83,849.59 213,480.20 155,182.21 364,838.80
  (a) Interest/discount on advances/bills 88,096.82 60,111.01 169,924.68 112,226.48 260,768.46
  (b) Income on investments 17,998.68 19,945.42 37,039.42 35,653.84 85,879.03
  (c) Interest on balances with RBI & other banks 1,871.46 2,325.66 3,815.55 4,465.49 9,037.14
  (d) Others 1,322.83 1,467.50 2,700.55 2,836.40 9,154.17
2 Other income (a+b) 75,661.84 97,328.86 119,196.15 165,234.48 390,100.32
  a) Profit/(Loss) on sale of investments including revaluation (insurance business) (5,856.58) 17,111.64 (31,403.62) 27,570.19 15,348.79
  b) Other income (see Notes 2 and 5) 81,518.42 80,217.22 150,599.77 137,664.30 374,751.53
3 Total income (1+2) 184,951.63 181,178.45 332,676.35 320,416.70 754,939.12
4 Interest expended 51,074.24 44,086.18 97,656.80 84,243.61 181,647.70
5 Operating expenses (a+b+c) 102,236.45 97,389.47 176,991.94 172,738.96 396,197.50
  (a) Payments to and Provisions for employees 31,708.98 28,480.70 63,577.00 52,749.59 119,789.20
  (b) Policy holders’ reserves, surrender expense and claims 24,385.33 36,874.69 28,842.87 63,374.95 142,438.11
  (c) Other operating expenses (see Note 3 and 5) 46,142.14 32,034.08 84,572.07 56,614.42 133,970.19
6 Total expenditure (4+5) (excluding provisions and contingencies) 153,310.69 141,475.65 274,648.74 256,982.57 577,845.20
7 Operating Profit before Provisions and Contingencies (3-6) 31,640.94 39,702.80 58,027.61 63,434.13 177,093.92
8 Provisions (other than tax) and Contingencies (see Note 1) 6,595.43 5,195.51 9,720.14 8,710.51 36,302.67
9 Exceptional Items - - - - -
10 Profit from Ordinary Activities before tax (7-8-9) 25,045.51 34,507.29 48,307.47 54,723.62 140,791.25
11 Tax expense (see Note 7) 8,927.48 11,581.68 18,257.26 18,180.18 44,918.61
12 Profit from Ordinary activities after tax before Minority Interest (10 – 11) 16,118.03 22,925.61 30,050.21 36,543.44 95,872.64
13 Extraordinary items (net of tax expense) - - - - -
14 Profit from Ordinary activities after tax before Minority Interest (12 - 13) 16,118.03 22,925.61 30,050.21 36,543.44 95,872.64
15 Less: Share of Minority Interest 132.40 (737.61) (901.66) (1,378.77) (1,868.75)
16 Add: Share in Profit of associates 111.43 482.23 130.10 817.18 1,381.27
17 Profit after tax (14-15+16) 16,097.06 24,145.45 31,081.97 38,739.39 99,122.66
18 Paid Up Equity Capital - (Face Value of Rs. 10 per share) 34,534.13 32,695.01 34,534.13 32,695.01 34,467.28
19 Group Reserves (excluding Minority Interest)         547,923.35
20 Minority Interest         5,123.34
21 Analytical Ratios          
  (i) Earnings per Share (before and after extraordinary items)          
  (a) Basic (not annualized) Rs. 4.66 7.39 9.01 11.87 29.62
  (b) Diluted (not annualized) Rs. 4.62 7.30 8.93 11.73 29.18
  (ii) NPA Ratios          
  (a) Gross NPA 68,432.36 45,243.63 68,432.36 45,243.63 56,719.36
  (b) Net NPA 41,596.08 32,127.27 41,596.08 32,127.27 36,266.58
  (c) % of Gross NPA/ Gross Advances 2.82 2.42 2.82 2.42 2.56
  (d) % of Net NPA/ Net Advances 1.73 1.73 1.73 1.73 1.65
  (e) % of Gross NPA/ Gross Advances (excluding NPAs acquired from other banks/ NBFCs) 1.24 0.78 1.24 0.78 0.85
  (f) % of Net NPA/ Net Advances (excluding NPAs acquired from other banks/ NBFCs) 0.53 0.33 0.53 0.33 0.33
  (iii) Return on Assets (average) (not annualised) 0.41 0.68 0.78 1.15 2.87

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 lakhs
Particulars Quarter Ended Half Year Ended Year Ended
Sep-08 (Unaudited) Sep-07 (Unaudited) Sep-08 (Unaudited) Sep-07 (Unaudited) Mar-08
(Audited)
Commission, Fees, Exchange and brokerage 29,635.08 45,770.60 58,548.90 74,165.48 167,628.83
Premium on insurance business 51,433.33 25,517.25 90,676.76 45,392.44 166,199.05
Others 450.01 8,929.37 1,374.11 18,106.38 40,923.65
Total - Other income 81,518.42 80,217.22 150,599.77 137,664.30 374,751.53

3. Details of other expenditure forming part of Consolidated uanudited results are as follows:
Rs lakhs
Particulars Quarter Ended Half Year Ended Year Ended
Sep-08 (Unaudited) Sep-07 (Unaudited) Sep-08 (Unaudited) Sep-07 (Unaudited) Mar-08 (Audited)
Brokerage 9,540.86 5,079.06 16,078.62 9,619.51 25,487.92
Depreciation 3,169.99 2,298.24 6,098.07 4,361.21 9,866.71
Rent, taxes and lighting 5,389.38 3,583.25 10,548.07 6,392.76 15,053.68
Others 28,041.91 21,073.53 51,847.31 36,240.94 83,561.88
Total – Other operating expenses 46,142.14 32,034.08 84,572.07 56,614.42 133,970.19

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. 1,518.15 lakhs for the quarter ended 30th September, 2008 and for half year ended 30th September, 2008 Rs. 2,607.84 lakhs (for the quarter ended 30th September, 2007 Rs. 3,904.21 lakhs, half year ended 30th September, 2007 Rs. 5,145.34 lakhs and for the year ended 31st March, 2008 Rs. 12,907.63 lakhs).

6 From April 1, 2008, The Group has changed its accounting policy in relation to structured liabilities. The derivative embedded in the structured liabilities is separately valued at each reporting date. All the outstanding derivatives contracts on the balance sheet date are marked to market. The resulting net losses are provided for and the net gains are ignored keeping in view the principle of prudence as enunciated in the Accounting Standard- 1, ‘Disclosure of Accounting Policies’. Had the previous accounting policy been followed the profit before tax for the quarter ended 30th September, 2008 would have been lower by Rs. 1,274.30 lakhs net and for the half year ended 30th September, 2008 by Rs. 3,499.60 lakhs net.

7 Provision for taxes (net of deferred tax) for the quarter ended 30th September, 2008, include Fringe Benefit Tax provision amounting to Rs. 355.14 lakhs and for half year ended 30th September, 2008 Rs. 723.12 lakhs (for the quarter ended 30th September, 2007 Rs. 309.83 lakhs and half year ended 30th September, 2007 Rs. 567.92 lakhs and for the year ended 31st March, 2008 Rs. 1,259.50 lakhs).

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

9 These results have not been subjected to a limited review by the statutory auditors of the Bank.

10 The above results were taken on record at the Audit Committee meeting and at the meeting of the Board of Directors held on 31st October, 2008.

KOTAK MAHINDRA BANK LIMITED (STANDALONE)

Registered Office: 36-38A, Nariman Bhavan, 227, Nariman Point, Mumbai 400 021
Rs lakhs
Sr No Particulars Quarter Ended Half Year Ended Year Ended
Sep-08 (Unaudited) Sep-07 (Unaudited) Sep-08 (Unaudited) Sep-07 (Unaudited) Mar-08 (Audited)
1 Interest earned (a+b+c+d) 74,612.82 59,181.61 145,859.59 108,904.44 253,536.43
a Interest/ discount on advances/ bills 61,382.84 42,252.27 117,826.94 78,808.17 180,204.79
b Income on investments 12,620.16 16,049.00 27,131.18 28,539.24 70,831.20
c Interest on balances with RBI & other banks 584.87 761.89 834.95 1,142.14 1,804.06
d Others 24.95 118.45 66.52 414.89 696.38
2 Other Income 6,064.41 12,234.78 13,377.02 21,957.24 46,346.33
3 Total income (1+2) 80,677.23 71,416.39 159,236.61 130,861.68 299,882.76
4 Interest expended 38,059.22 30,841.77 74,059.29 60,146.13 130,956.34
5 Operating expenses (a+b) 31,369.20 25,933.39 62,570.16 46,531.14 101,937.38
  (a) Payments to and Provisions for employees 14,131.36 12,483.31 29,337.57 23,260.74 48,394.89
  (b) Other Operating expenses 17,237.84 13,450.08 33,232.59 23,270.40 53,542.49
6 Total expenditure (4+5) 69,428.42 56,775.16 136,629.45 106,677.27 232,893.72
7 Operating Profit (3-6) 11,248.81 14,641.23 22,607.16 24,184.41 66,989.04
8 Other provisions & contingencies 3,781.46 3,814.15 6,951.31 6,689.53 27,210.99
9 Exceptional items - - - - -
10 Profit / Loss from Ordinary Activities before tax (7-8-9) 7,467.35 10,827.08 15,655.85 17,494.88 39,778.05
11 Provision for taxes 2,680.82 3,289.00 5,416.16 5,189.00 10,384.77
12 Net Profit / Loss from Ordinary Activities after tax (10-11) 4,786.53 7,538.08 10,239.69 12,305.88 29,393.28
13 Extraordinary items (net of tax expense) - - - - -
14 Net Profit / Loss for the Period (12-13) 4,786.53 7,538.08 10,239.69 12,305.88 29,393.28
15 Paid Up Equity Capital - (Face Value Rs. 10 per share) 34,534.13 32,695.01 34,534.13 32,695.01 34,467.28
16 Reserves excluding revaluation reserves         319,082.21
17 Analytical Ratios          
  (i) % of shares held by Govt. of India - - - - -
  (ii) % Capital adequacy ratio 17.22% 10.94% 17.22% 10.94% 18.65%
  (iii) Earnings Per Share (EPS) for the period - Not annualised          
  - Basic Rs. 1.39 2.31 2.97 3.77 8.78
- Diluted Rs. 1.37 2.28 2.94 3.73 8.65
  (iv) NPA Ratios          
  a) Gross Non-performing assets 54,494.92 34,975.60 54,494.92 34,975.60 45,307.90
  b) Net Non-performing assets 32,886.08 23,779.70 32,886.08 23,779.70 27,615.67
  c) % of Gross NPA to Gross Advances 3.16% 2.70% 3.16% 2.70% 2.88%
  d) % of Net NPA to net Advances 1.93% 1.85% 1.93% 1.85% 1.78%
  e) % of Gross NPA to Gross Advances (excluding NPAs acquired from other banks and NBFCs) 1.43% 0.96% 1.43% 0.96% 0.99%
  f) % of Net NPA to net Advances (excluding NPAs acquired from other banks and NBFCs) 0.63% 0.39% 0.63% 0.39% 0.38%
  g) Return on Assets (Average) – Not Annualized 0.18% 0.29% 0.39% 0.52% 1.10%
18 Public Shareholding          
  (i) No. of shares 164,186,068 143,217,887 164,186,068 143,217,887 160,969,300
  (ii) % of shareholding 47.55% 43.81% 47.55% 43.81% 46.71%

Segment Results

From the year ended 31st March, 2008, the Bank has adopted RBI's revised guidelines issued in April 2007 on segment reporting in terms of which the reportable segments are as under:

Segment Principal activity
Treasury Money market, forex market, derivatives, investments and primary dealership of government securities.
Retail Banking Includes:
(1) Commercial vehicle finance, personal loans, home loans, agriculture finance, credit cards and other loans/services which fulfil the four criteria of orientation, product, granularity and low value of individual exposures for retail exposures laid down in Basel Committee on Banking Supervision document "International Convergence of Capital Measurement and Capital Standards : A Revised Framework".
(2) Retail borrowings covering savings and current accounts and Branch Banking network and services including distribution of financial products.
Corporate/Wholesale Banking Wholesale borrowings and lendings and other related services to the corporate sector which are not included under retail banking
Other Banking business Management of Venture capital and private equity fund (upto 30th Sept., 2007)

Summary of the operating segments of the Bank for the half-year and quarter ended 30th September, 2008 & 30th September, 2007 and year ended 31st March, 2008 are as given below:
Rs lakhs
    Quarter Ended Half Year Ended Year Ended
Sep-08 (Unaudited) Sep-07 (Unaudited) Sep-08 (Unaudited) Sep-07 (Unaudited) Mar-08 (Audited)
1 Segment Revenue          
  a. Treasury 20,789.81 19,531.59 38,100.62 38,859.04 74,364.89
  b. Corporate/ Wholesale Banking 19,381.44 20,876.32 43,607.28 35,717.35 95,498.73
  c. Retail Banking:          
  (i) Lending 49,834.99 34,325.34 95,164.28 64,738.10 145,865.31
  (ii) Branch banking 19,277.96 15,622.88 36,418.88 28,126.52 64,508.80
  (iii) Credit Cards 394.94 - 680.38 - 0.02
  Sub-total 69,507.89 49,948.22 132,263.54 92,864.62 210,374.13
  d. Other Banking business - 549.73 - 911.65 911.70
  Sub-total 109,679.14 90,905.86 213,971.44 168,352.66 381,149.45
  Less : Inter-segmental revenue 29,010.16 19,574.11 54,743.08 37,783.37 81,744.16
  Add : Unallocated Income 8.25 84.64 8.25 292.39 477.47
  Total 80,677.23 71,416.39 159,236.61 130,861.68 299,882.76
2 Segment Results          
  a. Treasury 1,048.47 2,631.30 1,324.05 5,409.20 (582.57)
  b. Corporate/ Wholesale Banking 5,464.69 6,709.59 12,486.39 9,978.63 33,362.92
  c. Retail Banking: -        
  (i) Lending 9,087.65 5,745.30 18,392.14 9,911.39 21,662.84
  (ii) Branch banking (5,971.50) (4,516.12) (13,150.29) (8,388.30) (14,668.30)
  (iii)Credit Cards (2,170.21) - (3,404.69) - (765.91)
  Sub-total 945.94 1,229.18 1,837.16 1,523.09 6,228.63
  d. Other Banking business - 172.37 - 291.57 291.60
  Sub-total 7,459.10 10,742.44 15,647.60 17,202.49 39,300.58
  Add : Unallocated Income 8.25 84.64 8.25 292.39 477.47
  Total Profit Before Tax 7,467.35 10,827.08 15,655.85 17,494.88 39,778.05
3 Segment Assets          
  a. Treasury 908,355.65 1,429,110.64 908,355.65 1,429,110.64 1,183,461.05
  b. Corporate/ Wholesale Banking 798,653.48 1,231,822.66 798,653.48 1,231,822.66 821,633.05
  c. Retail Banking:          
  (i) Lending 1,244,915.40 926,834.34 1,244,915.40 926,834.34 1,158,068.02
  (ii) Branch banking 860,234.39 734,370.50 860,234.39 734,370.50 799,651.11
  (iii) Credit Cards 10,035.43 - 10,035.43 - 28.22
  Sub-total 2,115,185.22 1,661,204.84 2,115,185.22 1,661,204.84 1,957,747.35
  d. Other Banking business - 278.39 - 278.39 -
  Sub-total 3,822,194.35 4,322,416.53 3,822,194.35 4,322,416.53 3,962,841.45
  Less: Inter-segmental Assets 1,110,764.45 1,558,452.25 1,110,764.45 1,558,452.25 1,145,792.42
  Total 2,711,429.90 2,763,964.28 2,711,429.90 2,763,964.28 2,817,049.03
4 Segment Liabilities          
  a. Treasury 785,452.32 1,403,539.30 785,452.32 1,403,539.30 1,046,265.80
  b. Corporate/ Wholesale Banking 631,715.58 1,111,877.66 631,715.58 1,111,877.66 665,997.26
  c. Retail Banking:          
  (i) Lending 1,172,665.59 892,170.31 1,172,665.59 892,170.31 1,088,125.37
  (ii) Branch banking 873,384.68 742,758.80 873,384.68 742,758.80 814,242.62
  (iii) Credit Cards 2,228.66 - 2,228.66 - -
  Sub-total 2,048,278.93 1,634,929.11 2,048,278.93 1,634,929.11 1,902,367.99
  d. Other Banking business - - - - -
  Sub-total 3,465,446.83 4,150,346.07 3,465,446.83 4,150,346.07 3,614,631.05
  Less: Inter-segmental Liabilities 1,110,764.45 1,558,452.25 1,110,764.45 1,558,452.25 1,145,792.42
  Total 2,354,682.38 2,591,893.82 2,354,682.38 2,591,893.82 2,468,838.63
5 Unallocated Assets net of Liabilities 9,090.56 5,191.63 9,090.56 5,191.63 5,341.36

In order to facilitate comparison, given below is the summary of the operating segments of the Bank for the half-year ended and quarter ended 30th September, 2008 in accordance with Accounting Standard 17 (AS-17) on Segment Reporting issued by the Institute of Chartered Accountants of India & the comparative numbers for the half-year ended and quarter ended 30th September, 2007 & year ended 31st March, 2008 are given below:
Rs lakhs
    Quarter Ended Half Year Ended Year Ended
Sep-08 (Unaudited) Sep-07 (Unaudited) Sep-08 (Unaudited) Sep-07 (Unaudited) Mar-08 (Audited)
1 Segment Revenue          
  a. Lending 55,496.36 37,899.75 110,198.22 70,928.47 174,347.24
  b. Corporate Banking 14,115.01 17,301.91 29,253.72 29,526.98 67,016.82
  c. Treasury & Investments 20,789.81 19,531.59 38,100.62 38,859.04 74,364.89
  d. Retail Liabilities 19,277.96 15,622.88 36,418.88 28,126.52 64,508.80
  e. Venture Fund Management - 549.73 - 911.65 911.70
  Sub-total 109,679.14 90,905.86 213,971.44 168,352.66 381,149.45
  Less: Inter-segmental revenue 29,010.16 19,574.11 54,743.08 37,783.37 81,744.16
  Add: Unallocated Income 8.25 84.64 8.25 292.39 477.47
  Total 80,677.23 71,416.39 159,236.61 130,861.68 299,882.76
2 Segment Results          
  a. Lending 8,011.39 6,024.49 20,035.18 10,356.88 33,995.36
  b. Corporate Banking 4,370.74 6,430.40 7,438.66 9,533.14 20,264.49
  c. Treasury & Investments 1,048.47 2,631.30 1,324.05 5,409.20 (582.57)
  d. Retail Liabilities (5,971.50) (4,516.12) (13,150.29) (8,388.30) (14,668.30)
  f. VentureFund Management - 172.37 - 291.57 291.60
  Total 7,459.10 10,742.44 15,647.60 17,202.49 39,300.58
  Add: Unallocated Income 8.25 84.64 8.25 292.39 477.47
  Total Profit Before Tax 7,467.35 10,827.08 15,655.85 17,494.88 39,778.05
3 Segment Assets          
  a. Lending 1,428,529.40 1,022,264.81 1,428,529.40 1,022,264.81 1,325,413.43
  b. Corporate Banking 625,074.91 1,136,392.19 625,074.91 1,136,392.19 654,315.86
  c. Treasury & Investments 908,355.65 1,429,110.64 908,355.65 1,429,110.64 1,183,461.05
  d. Retail Liabilities 860,234.39 734,370.50 860,234.39 734,370.50 799,651.11
  e. Venture Fund Management - 278.39 - 278.39 -
  Sub-total 3,822,194.35 4,322,416.53 3,822,194.35 4,322,416.53 3,962,841.45
  Less: Inter-segmental Assets 1,110,764.45 1,558,452.25 1,110,764.45 1,558,452.25 1,145,792.42
  Total 2,711,429.90 2,763,964.28 2,711,429.90 2,763,964.28 2,817,049.03
4 Segment Liabilities          
  a. Lending 1,190,561.76 907,188.93 1,190,561.76 907,188.93 1,101,893.44
  b. Corporate Banking 616,048.07 1,096,859.04 616,048.07 1,096,859.04 652,229.19
  c. Treasury & Investments 785,452.32 1,403,539.30 785,452.32 1,403,539.30 1,046,265.80
  d. Retail Liabilities 873,384.68 742,758.80 873,384.68 742,758.80 814,242.62
  e. Venture Fund Management - 0.00 - 0.00 -
  Sub-total 3,465,446.83 4,150,346.07 3,465,446.83 4,150,346.07 3,614,631.05
  Less: Inter-segmental Liabilities 1,110,764.45 1,558,452.25 1,110,764.45 1,558,452.25 1,145,792.42
  Total 2,354,682.38 2,591,893.82 2,354,682.38 2,591,893.82 2,468,838.63
5 Unallocated Assets net of Liabilities 9,090.56 5,191.63 9,090.56 5,191.63 5,341.36

1 During the quarter, the Bank has granted NIL options under employee stock option scheme. 293,530 options were exercised by the employees during the quarter and the stock options outstanding with employees of the Bank and its subsidiaries as at 30th September, 2008 are 11,007,565.

2 Provision for taxes includes fringe benefit tax provision amounting to Rs.160 lakhs for the quarter ended 30th September, 2008 (Rs. 138 lakhs for the quarter ended 30thSeptember, 2007) and Rs.550 lakhs for the year ended 31st March, 2008.

3 Status of shareholder complaints received during the quarter ended 30th September, 2008:

Total complaints pending as at 30th June, 2008

 NIL

Total complaints received during the quarter ended 30th September, 2008

 35

Total complaints resolved during the quarter ended 30th September, 2008

 35

Total complaints pending as at 30th September, 2008

 NIL

4 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. 1,530.87 lakhs. The total investment made by the Bank in Kotak Life as on 30th September, 2008 is Rs. 26,024.80 lakhs.

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

6 There are no significant changes in the accounting policies during the quarter.

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

8 These results for the quarter ended 30th September 2008 have been subjected to a "Limited Review" by the Statutory Auditors of the Bank.

9 The above results were taken on record at the Audit Committee meeting and at the meeting of the Board of Directors held on 31st October, 2008.

 

By order of the Board of Directors
  For Kotak Mahindra Bank Limited
   
   
  Dipak Gupta
Mumbai, 31 st October, 2008

 Executive Director