A decline by 64% in the net profit of Kotak Mahindra Bank to Rs 130.9 crore for the quarter ended December 2008 compared to the year-ago period was reported by the bank today.

Due to weak liquidity and lower advances, the quarter registered fall in the total income of the bank. Total income fell by 32.14 per cent to Rs 1,684.75 crore during the quarter under consideration, from Rs 2,482.72 crore in the same period.

There was an improvement by 6% in the Net interest margin (NIM), the main yardstick to assess a lender's profitability as against 5.7% at the end of the quarter ended December 2007. The impact of the slowdown in the capital markets had to be tolerated by Kotak Mahindra Capital and Kotak Securities.

Whereas Kotak Securities experienced a 97.3 per cent plunge in net profit - to Rs 3.97 crore from Rs 146.73 crore -- in the same period, Kotak Mahindra Capital recorded Rs 1.9 crore loss as against a net profit of Rs 21.58 crore during the corresponding quarter a year ago.

Net profit of Rs 9.36 crore was recored by the bank's insurance arm, Kotak Mahindra Old Mutual Life Insurance as against a loss of Rs 20.57 crore for the same quarter last year.

The bank said via a statement, "The mutual fund arm almost doubled its profit to Rs 6 crore. During the October-December period, the bank disbursed Rs 23,865 crore loans as compared to Rs 21,420 crore during the same period last year."

There was a 41% decline in the bank's PAT at Rs 441.72 crore, and a total income of Rs 5,011.51 crore for the nine-month ended December 2008.

Furthermore, a 10.49% rise in its lending operations at Rs 566.6 crore during the third quarter as against Rs 512.8 crore for the corresponding three months of last year was also recorded by the bank. There was a growth by 21% in the total advances on a standalone basis to Rs 17,679.4 crore.