Kotak Mahindra Bank Management Guidance Tracker

Management expects net interest margin to stay above 5% for the current fiscal year, despite normalization from peak of 5.75%.

Management expects NIM to stabilize as ~15bps of one-off drag (CRR, liquidity buffer) is unlikely to repeat next quarter.

Management noted current cost-to-assets above 3% is partly due to investment mode, with intention to bring it down over time.

The 50 bps cut on savings deposits up to ₹5 lakh, effective Oct 17, is expected to add about 4 bps to NIM.

Management expects cost control measures and fee income growth to support ROA above 2% as credit costs normalize.

Management expects NIM to stabilize in the second half of the year as deposit repricing and CRR cuts offset asset yield drag, assuming no further repo rate cuts.

Management expects NIM to improve gradually in H2 FY26 as deposit repricing benefits flow through, assuming no further repo rate cuts.

Management expects NIM to increase moderately in Q4 due to full-quarter benefit of CRR cuts and seasonal aberrations, assuming no further rate cuts.

Management aims to maintain cost-to-asset ratio in the range of 2.5%-2.6% over the medium term, driven by fixed cost control and digitization.

Management expects NIM to reduce gradually in FY27, with the reduction more pronounced in the second half, but at a much slower pace than the 36 bps drop in FY26.

Management expects continued improvement in cost-to-asset ratio through fixed cost reduction and automation, building on the 27 bps improvement in FY26.

The bank aims to grow advances at 1.5 to 2 times nominal GDP growth for the full year, implying around 15-20% YoY.

Management indicated comfort in growing unsecured retail advances to early-to-mid teens as a percentage of net advances, from current 11.6%.

CFO stated that historically, loan growth has been 1.75-2 times nominal GDP, and current environment supports high-teens growth.

Management reiterated aspiration to grow unsecured loans to mid-teens as a percentage of total advances, driven by personal loans, business loans, and microfinance.

The bank aims to grow customer assets at 1.5-2 times nominal GDP growth, implying continued above-system growth.

Management reiterated goal to reach mid-teens as a percentage of total advances once the RBI embargo is lifted.

Management expects credit costs to stabilize and then decline over the next 2-3 quarters as recoveries from secured and rural books offset slippages.

Management reiterated target to grow advances at 1.5 to 2 times nominal GDP growth, maintaining disciplined underwriting.

Once the RBI embargo is lifted, the bank plans to aggressively grow credit cards and personal loans, aiming to restore unsecured mix.

Management reiterated its philosophy to grow advances at 1.5 to 2 times nominal GDP growth, targeting sustainable franchise building.

Microfinance credit costs have peaked in Q1 and are expected to show a declining trend in coming quarters as fresh disbursements resume cautiously.

Credit card credit costs have plateaued and should start declining in the second half of the year.

Aspirationally, the bank aims to grow retail unsecured advances to 15% of total advances, from current 9.7%, through MFI, personal loans, and credit cards.

Credit costs are expected to continue moderating in H2, with personal loan normalized, MFI improving, and credit cards stabilizing.

Management aims to gradually rebuild the unsecured retail book (credit cards, personal loans) with disciplined underwriting, targeting growth in coming quarters.

Credit cost expected to continue its downward trend in Q4 and Q1, though at a moderated pace, with retail CV stress plateauing.

Personal loan book expected to return to growth in coming quarters as organic disbursements pick up, while credit card spend growth to follow.

Credit cost is expected to remain lower, driven by improved collection efficiency and tighter underwriting, especially in unsecured segments.

Management plans to continue aggressive focus on ActivMoney as a core deposit product, expecting it to drive customer acquisition and retention.

RBI approval received; acquisition of microfinance NBFC Sonata Finance expected to be consummated by Q4 FY24.

The bank plans to continue adding around 150 branches annually, focusing on under-penetrated areas.

Plans to add 150-250 branches per year, focusing on top 68-75 cities, to reach 3,000-3,500 branches over 4-5 years.

CEO Ashok Vaswani reiterated the aspiration to become the third-largest private sector bank in India over five years, through organic and inorganic growth.

The acquired Standard Chartered portfolio is expected to be fully migrated onto Kotak's books during Q4 FY25.

Management expects operating costs to trend downward after a temporary increase from technology investments, likely within six months.

CFO confirmed that incremental costs related to the RBI embargo are within the guidance provided last quarter.

Management expects microfinance credit costs to remain elevated for the next two quarters before normalizing.

Management expects credit card delinquencies to plateau and then decline in the second half of FY26.

Technology expenditure will remain around 10% of total operating expenses, with a shift toward risk resilience and capacity.

The acquisition of Standard Chartered's personal loan portfolio will add about 2 bps to average asset yield.