On a standalone basis, it reported a 23 per cent increase in profit to Rs 1,595.90 crore.
The bank, whose scrip witnessed a 4.70 per cent correction after the results, will only be able to achieve a credit growth in "mid-teens" which is slower than the initial expectations, its joint managing director Dipak Gupta told reporters here.
The private sector lender reported a 10 per cent growth in advances, which just a notch above the system's growth.
Gupta said the bank wants to "genuine and lendable" borrowers who are few in number, and also pointed to RBI's single group exposure norms as a worry impeding growth.
He said there has been an increase in the "unknown unknowns", wherein an otherwise well performing concern goes suddenly reports troubles and underlined that this aspect is entity-specific and not sectoral.
The bank's stock of gross non-performing assets (NPAs) increased to 2.46 per cent as against 2.07 per cent in the year-ago period. A third of its over Rs 1,000 crore in fresh slippages came from two "unknown-unknowns", where a company was downgraded due to unforseen events.
The "unknown unknowns" are coming up because of a variety of challenges, including governance, accounting issues, regulatory moves and judicial interventions, he said, without elaborating or pointing out to the two cases.
On the loan growth front, the bank did not write much of loans on the corporate side which accounts for over 40 per cent of the book due to slowdown in capex, Gupta said.
Stating that the retail book quality is holding up as the broader economic worries are not playing into jobs as yet, Gupta said it is cautious on the unsecured part where there is a threat of a ponzi behaviour where one borrower borrows from multiple institutions to take care of repayments.
"The companies who you can lend comfortably has shrunk, the choice is how much more can you lend to them. SME loan growth has been slow, loan requirements in that segment are pretty restricted so we have not found opportunities to grow as much as we would want," Gupta said.
He explained writing a loan gives a 2 percentage point spread to a bank as interest income, difficulties in recoveries can lead to 100 per cent wipe-off of the same amount, and added that the shocks typically come to haunt a bank three years later.
Nominal GDP growth has to go up to above 10 per cent from the under 8 per cent in order to get the loan growth back, he said, adding that from a future outlook perspective, things are looking at the most positive in two quarters now.
The share of advances with unpaid dues for 61-90 days came down in the December quarter to Rs 374 crore, Gupta said.
For the reporting quarter, the bank's net interest income grew 17.22 per cent to Rs 3,430 crore, helped majorly by an expansion in net interest margin to 4.66 per cent from the year-ago's 4.22 per cent.
Its overall provisions came at Rs 444 crore as against a write-back of Rs 32.30 crore in the year-ago period and the quarter ago's Rs 407 crore. Gupta said its distressed asset fund has closed a deal recently without elaborating on the transaction.
All the subsidiaries reported s surge in profits, including broking arm's Rs 128 crore, life insurance arm's Rs 166 crore and Kotak Mahindra Capital's Rs 40 crore.
The bank scrip closed 4.70 per cent down at Rs 1,618.05 on the BSE, as against a 0.99 per cent correction on the 30-share benchmark. AA MKJ