Kotak Bank suffers derivative burns

OUR special CORRESPONDENT

Kotak Mahindra Depository Financial Institution vice-chairman and managing manager Uday Kotak in Mumbai on Friday. (PTI)

Mumbai, May 9: After ICICI Depository Financial Institution and the State Depository Financial Institution of Republic Of India (SBI), it’s now the bend of Kotak Mahindra Depository Financial Institution to take a derivative hit.

The private depository financial institution today said it had made a provisioning of Rs 86 crore to cover the mark-to-market (MTM) losings of its clients on business relationship of forex derived function transactions.

The depository financial institution have got around 45 clients, having exposure to forex derivatives, who have suffered MTM losings of Rs 612 crore on business relationship of forex minutes as on May 8, 2008.

MTM is the pattern of assigning a value to a fiscal instrument based on its current marketplace price.

“We carry a proviso of Rs 86 crore toward stressed assets. In this respect (exposure to forex derivatives), the depository financial institution have no exposure to SME clients,” Uday Kotak, the bank’s vice-chairman and managing director, told newsmen here today.

A host of lenders, including the SBI and ICICI Bank, have made commissariat on business relationship of losings of their clients in forex transactions.

The SBI have made a proviso of $10 million (around Rs 40 crore) to cover forex losings of its clients, which is in the scope of Rs 600-700 crore, while ICICI Depository Financial Institution have made provisioning of around $170 million (around Rs 680 crore).

On a amalgamate basis, Kotak Mahindra Depository Financial Institution posted a net income growing charge per unit of 41 per cent for the 4th one-fourth ended March 31, 2008. Net net income grew to Rs 240 crore from Rs 170 crore in the same time period last year.

Net net income for the full twelvemonth rose 84 per cent to Rs 991 crore (Rs 538 crore). The standalone Numbers for the one-fourth showed a net income growing of 86 per cent to Rs 69 crore.

Kotak Mahindra Depository Financial Institution said amalgamate fee income was up 59 per cent to Rs 1,676 crore in 2007-08 from Rs 1,053 crore last year. For the 4th quarter, fee income was up 37 per cent to Rs 407 crore from Rs 297 crore in same time period last year.

Consolidated progresses was up 41 per cent year-on-year to Rs 21,985 crore as on March 31, 2008, with retail and commercial loans comprising 89 per cent of the portfolio. Consolidated network involvement border (NIM) for the twelvemonth was a strong 5.6 per cent.

Deposits of the depository financial institution grew 49 per cent to Rs 16,005 crore (excluding impermanent sedimentations held as aggregation bankers to IPOs) as on March 31, 2008 from Rs 10,251 crore last year. Current and economy business relationship sedimentations comprised 27 per cent of entire sedimentations (22 per cent) and entire Numbers of sedimentation business relationships have got more than than doubled at 749,000 as on March 31, 2008 (350,000), the depository financial institution reported.