Kotak Mahindra Bank FY24 Annual Earnings Summary
4 quarters covered · ₹12,869 Cr revenue · ₹18,213 Cr PAT · 0.0% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q2 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY24Risks flagged during the year
Cost of deposits rose ~20bps QoQ, and further repricing could compress NIM if asset yields do not keep pace.
Q3 FY24 · highIntense competition for deposits may increase cost of funds, compressing NIMs despite asset mix improvements.
Q4 FY24 · highThe RBI order stopping digital customer acquisition and credit card issuance could last longer than expected, impacting growth and market share.
Q1 FY24 · mediumCredit costs are normalizing from historically low levels, with potential increase as unsecured portfolio mix rises.
Q1 FY24 · mediumIntense competition in wholesale lending is causing spread compression, which could pressure NIMs.
Q1 FY24 · mediumHigh attrition (~50%) in junior management (sales, service, call center) could increase employee costs and impact operations.
Q2 FY24 · mediumCASA ratio fell to 48.3% as customers shift to term deposits; management noted industry-wide SA challenges but no clear recovery timeline.
Q2 FY24 · mediumWhile management downplayed risks, analysts flagged potential stress in unsecured loans; management acknowledged slight elevation in 90+ days card delinquencies.
Q3 FY24 · mediumRBI's increased risk weights on personal loans and NBFC loans could slow growth or require higher pricing, affecting volumes.
Q3 FY24 · mediumManagement noted emerging risks in credit cards due to customer leverage buildup, though currently under control.
Q4 FY24 · mediumSlippages in unsecured loans have inched up; a sharper-than-expected deterioration could pressure credit costs.
Q4 FY24 · mediumCASA ratio declined to 45.5% and deposit costs are rising; continued pressure could compress NIMs.
What changed through the year
Q1 FY24 · NIM to remain above 5% for FY24
Management expects net interest margin to stay above 5% for the current fiscal year, despite normalization from peak of 5.75%.
Q1 FY24 · Loan growth of 1.5-2x nominal GDP
The bank aims to grow advances at 1.5 to 2 times nominal GDP growth for the full year, implying around 15-20% YoY.
Q1 FY24 · ActivMoney as sustained strategic product
Management plans to continue aggressive focus on ActivMoney as a core deposit product, expecting it to drive customer acquisition and retention.
Q2 FY24 · NIM stabilization expected
Management expects NIM to stabilize as ~15bps of one-off drag (CRR, liquidity buffer) is unlikely to repeat next quarter.
Q2 FY24 · Sonata Finance acquisition to close by Q4 FY24
RBI approval received; acquisition of microfinance NBFC Sonata Finance expected to be consummated by Q4 FY24.
Q2 FY24 · Technology cost bubble to subside in 6 months
Management expects operating costs to trend downward after a temporary increase from technology investments, likely within six months.
Q3 FY24 · Unsecured retail advances to reach early-to-mid teens
Management indicated comfort in growing unsecured retail advances to early-to-mid teens as a percentage of net advances, from current 11.6%.
Q3 FY24 · Loan growth to track 1.75-2x nominal GDP
CFO stated that historically, loan growth has been 1.75-2 times nominal GDP, and current environment supports high-teens growth.
Q3 FY24 · OpEx to assets ratio expected to decline from 3%+
Management noted current cost-to-assets above 3% is partly due to investment mode, with intention to bring it down over time.
Q4 FY24 · Unsecured loan mix target of mid-teens
Management reiterated aspiration to grow unsecured loans to mid-teens as a percentage of total advances, driven by personal loans, business loans, and microfinance.
Q4 FY24 · Branch expansion of ~150 branches per year
The bank plans to continue adding around 150 branches annually, focusing on under-penetrated areas.
Q4 FY24 · Tech spend at ~10% of opex
Technology expenditure will remain around 10% of total operating expenses, with a shift toward risk resilience and capacity.
Q4 FY24 · Growth aspiration of 1.5-2x nominal GDP
The bank aims to grow customer assets at 1.5-2 times nominal GDP growth, implying continued above-system growth.