Kotak Mahindra Bank vice-chairman and managing director Uday Kotak in Mumbai on Friday. (PTI)

Mumbai, May 9: After ICICI Bank and the State Bank of India (SBI), it’s now the turn of Kotak Mahindra Bank to take a derivative hit.

The private bank today said it had made a provisioning of Rs 86 crore to cover the mark-to-market (MTM) losses of its clients on account of forex derivative transactions.

The bank has around 45 clients, having exposure to forex derivatives, who have suffered MTM losses of Rs 612 crore on account of forex transactions as on May 8, 2008.

MTM is the practice of assigning a value to a financial instrument based on its current market price.

“We carry a provision of Rs 86 crore toward stressed assets. In this regard (exposure to forex derivatives), the bank has no exposure to SME clients,” Uday Kotak, the bank’s vice-chairman and managing director, told reporters here today.

A host of lenders, including the SBI and ICICI Bank, has made provisions on account of losses of their clients in forex transactions.

The SBI has made a provision of $10 million (around Rs 40 crore) to cover forex losses of its clients, which is in the range of Rs 600-700 crore, while ICICI Bank has made provisioning of around $170 million (around Rs 680 crore).

On a consolidated basis, Kotak Mahindra Bank posted a profit growth rate of 41 per cent for the fourth quarter ended March 31, 2008. Net profit grew to Rs 240 crore from Rs 170 crore in the same period last year.

Net profit for the full year rose 84 per cent to Rs 991 crore (Rs 538 crore). The standalone numbers for the quarter showed a profit growth of 86 per cent to Rs 69 crore.

Kotak Mahindra Bank said consolidated fee income was up 59 per cent to Rs 1,676 crore in 2007-08 from Rs 1,053 crore last year. For the fourth quarter, fee income was up 37 per cent to Rs 407 crore from Rs 297 crore in same period last year.

Consolidated advances 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 net interest margin (NIM) for the year was a strong 5.6 per cent.

Deposits of the bank grew 49 per cent to Rs 16,005 crore (excluding temporary deposits held as collection bankers to IPOs) as on March 31, 2008 from Rs 10,251 crore last year. Current and saving account deposits comprised 27 per cent of total deposits (22 per cent) and total numbers of deposit accounts have more than doubled at 749,000 as on March 31, 2008 (350,000), the bank reported.