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View Promises →Kotak Mahindra Bank Limited — Q2 FY24
Kotak Mahindra Bank reported a 24% YoY rise in consolidated PAT to ₹4,461 crore for Q2 FY24, driven by strong loan growth (21% YoY) and fee income.
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Kotak Mahindra Bank reported a 24% YoY rise in consolidated PAT to ₹4,461 crore for Q2 FY24, driven by strong loan growth (21% YoY) and fee income. However, NIM compressed more than expected to 5.22% due to higher liquidity buffers, CRR impact, and short-term fund inflows, with ~15bps considered non-recurring. CASA ratio slipped to 48.3% as customers shifted to term deposits and ActivMoney. Asset quality improved with GNPA at 1.78% and PCR at 79%. Management expects NIM to stabilize as one-offs fade, but cost of funds may rise further. The RBI approved Ashok Vaswani as the next MD & CEO. Key risk: sustained margin pressure if deposit repricing outpaces asset yields.
कोटक महिंद्रा बैंक ने Q2 FY24 में 24% ज्यादा मुनाफा कमाया, जो ₹4,461 करोड़ रहा। इसकी वजह लोन में 21% बढ़ोतरी और फीस से हुई कमाई थी। लेकिन ब्याज दरों पर कमाई (NIM) घटकर 5.22% रह गई, क्योंकि बैंक ने ज्यादा नकदी रखी और RBI के नियमों का असर पड़ा। इसमें से करीब 15bps एक बार का असर था। CASA यानी सस्ते जमा का हिस्सा घटकर 48.3% रह गया, क्योंकि लोगों ने ज्यादा ब्याज वाली एफडी और एक्टिवमनी में पैसा लगाया। बैंक के खराब कर्ज (GNPA) 1.78% पर आ गए और प्रावधान कवरेज 79% रहा। प्रबंधन का कहना है कि NIM जल्द स्थिर होगा, लेकिन जमा पर ब्याज और बढ़ सकता है। RBI ने अशोक वासवानी को नया MD & CEO मंजूर किया। मुख्य जोखिम: अगर जमा पर ब्याज लोन से ज्यादा बढ़ा तो मुनाफा दबाव में आ सकता है।
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Margin pressure from rising deposit costs
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Read Transcript →Quarter Snapshot
Customer base
45.8M
+9.2M YoY
Bank added 9.2 million customers year-over-year, reaching 45.8 million as of September 2023.
CASA ratio
48.3%
-70bps QoQ
CASA ratio declined sequentially to 48.3% as customers moved to term deposits and ActivMoney.
Kotak Securities market share
8.8%
+3.8pp YoY
Kotak Securities' combined market share jumped from 5% to 8.8% year-over-year.
Unsecured retail advances growth
44%
+44% YoY
Unsecured retail advances grew 44% YoY, driven by credit cards and personal loans.
What Changed vs Last Quarter
NEW
NIM stabilization expected
Management expects NIM to stabilize as ~15bps of one-off drag (CRR, liquidity buffer) is unlikely to repeat next quarter.
NEW
Sonata Finance acquisition to close by Q4 FY24
RBI approval received; acquisition of microfinance NBFC Sonata Finance expected to be consummated by Q4 FY24.
NEW
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.
DROPPED
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%.
DROPPED
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.
DROPPED
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.
NEW RISK
Margin pressure from rising deposit costs
Cost of deposits rose ~20bps QoQ, and further repricing could compress NIM if asset yields do not keep pace.
NEW RISK
CASA ratio decline may persist
CASA ratio fell to 48.3% as customers shift to term deposits; management noted industry-wide SA challenges but no clear recovery timeline.
NEW RISK
Unsecured loan delinquencies could rise
While management downplayed risks, analysts flagged potential stress in unsecured loans; management acknowledged slight elevation in 90+ days card delinquencies.
RISK GONE
Normalization of credit costs
Credit costs are normalizing from historically low levels, with potential increase as unsecured portfolio mix rises.
RISK GONE
Margin compression from competitive pricing
Intense competition in wholesale lending is causing spread compression, which could pressure NIMs.
RISK GONE
Attrition in junior management
High attrition (~50%) in junior management (sales, service, call center) could increase employee costs and impact operations.
RISK GONE
Impact of monsoon on tractor and agri portfolio
Uneven monsoon distribution could affect demand and collections in tractor and agri finance segments.
Fast read
Guidance and risk preview
Management expects NIM to stabilize as ~15bps of one-off drag (CRR, liquidity buffer) is unlikely to repeat next quarter.
Cost of deposits rose ~20bps QoQ, and further repricing could compress NIM if asset yields do not keep pace.
View Risks →