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View Promises →Kotak Mahindra Bank Limited — Q2 FY25
Kotak Mahindra Bank reported a consolidated PAT of ₹5,044 crore (+13% YoY) for Q2 FY25, driven by strong subsidiary performance (capital markets +52%, AMC +58%, insurance +50%).
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Kotak Mahindra Bank reported a consolidated PAT of ₹5,044 crore (+13% YoY) for Q2 FY25, driven by strong subsidiary performance (capital markets +52%, AMC +58%, insurance +50%). The bank's customer assets grew 18% YoY to ₹4.5 lakh crore, but NIM compressed 11bps QoQ to 4.91% due to a shift toward secured lending amid the RBI embargo on digital credit card issuance. Deposit growth was healthy at 16% YoY, with CASA stable at 43.6%. Credit costs rose to 65bps annualized, driven by stress in unsecured retail (credit cards) and microfinance, which management expects to persist for 2-3 quarters before improving. The RBI's draft circular on investments and the ongoing tech embargo remain key overhangs. Management guided for margin improvement from savings rate cuts and the StanChart portfolio acquisition, but near-term growth is constrained by regulatory restrictions.
कोटक महिंद्रा बैंक ने दूसरी तिमाही में 5,044 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछले साल से 13% ज्यादा है। यह इसकी सहायक कंपनियों (शेयर बाजार, म्यूचुअल फंड और बीमा) के अच्छे प्रदर्शन से हुआ। बैंक के ग्राहकों के पैसे (लोन और निवेश) 18% बढ़कर 4.5 लाख करोड़ रुपये हो गए। लेकिन ब्याज से कमाई का मार्जिन (NIM) थोड़ा घटकर 4.91% रह गया, क्योंकि बैंक ने RBI के क्रेडिट कार्ड बैन के कारण सुरक्षित लोन पर जोर दिया। जमा 16% बढ़ी और CASA (सस्ती जमा) 43.6% पर स्थिर रही। कर्ज देने में लागत (क्रेडिट कॉस्ट) बढ़कर 0.65% हो गई, खासकर क्रेडिट कार्ड और माइक्रोफाइनेंस में, जो 2-3 तिमाही तक जारी रह सकती है। RBI के नियम और तकनीकी पाबंदी अभी चिंता का विषय हैं। बैंक का कहना है कि ब्याज दरों में कटौती और नए पोर्टफोलियो से मार्जिन सुधरेगा, लेकिन नियमों के कारण तुरंत बढ़ोतरी मुश्किल है।
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RBI embargo on digital credit card issuance continues
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Read Transcript →Quarter Snapshot
CASA Ratio
43.6%
+0 bps QoQ
CASA ratio improved marginally QoQ, with savings deposits growing 5% sequentially.
Credit Cost (Annualized)
65 bps
+15 bps YoY (approx)
Increased due to higher slippages in unsecured retail and microfinance portfolios.
Unsecured Retail Mix
11.3%
-1.7pp YoY (approx)
Declined due to the RBI embargo on credit card issuance and cautious MFI growth.
Kotak AMC AUM
₹4.7 trillion
+41% YoY
Average AUM grew strongly, with equity AUM up 61% YoY to ₹3.1 trillion.
What Changed vs Last Quarter
NEW
Savings rate cut to improve NIM by ~4 bps
The 50 bps cut on savings deposits up to ₹5 lakh, effective Oct 17, is expected to add about 4 bps to NIM.
NEW
StanChart portfolio to add ~2 bps to yield
The acquisition of Standard Chartered's personal loan portfolio will add about 2 bps to average asset yield.
NEW
Credit costs to stabilize and decline in 2-3 quarters
Management expects credit costs to stabilize and then decline over the next 2-3 quarters as recoveries from secured and rural books offset slippages.
NEW
Target to be #3 private bank in 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.
DROPPED
Unsecured retail book target of mid-teens remains
Management reiterated goal to reach mid-teens as a percentage of total advances once the RBI embargo is lifted.
DROPPED
Branch network to reach 3,000-3,500 in 4-5 years
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.
DROPPED
IT embargo costs within earlier estimate
CFO confirmed that incremental costs related to the RBI embargo are within the guidance provided last quarter.
NEW RISK
RBI embargo on digital credit card issuance continues
The tech embargo restricts digital onboarding for credit cards, limiting growth in unsecured retail and pressuring NIM.
NEW RISK
RBI draft circular on investments could force business restructuring
The draft circular may require consolidation of lending subsidiaries into the bank, impacting capital allocation and business models.
NEW RISK
Margin pressure from asset mix shift and potential rate cuts
NIM compressed 11bps QoQ due to shift to secured assets; further rate cuts could pressure yields, though deposit costs may lag.
RISK GONE
Sustained NIM compression
NIM fell 20bps QoQ to 5.02% due to rising deposit costs and lower unsecured lending; further pressure could persist if CASA does not recover.
RISK GONE
RBI embargo timeline uncertainty
Management declined to provide a specific timeline for lifting the embargo, citing dependence on RBI's comfort with progress and sustainability.
RISK GONE
Microfinance volatility in select states
Delinquencies in microfinance rose in states like Tamil Nadu, MP, and UP due to heat waves and elections; recovery expected in H2 but uncertain.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q3 FY24, Q4 FY24
The bank aims to grow customer assets at 1.5-2 times nominal GDP growth, implying continued above-system growth.
Mentioned in Q1 FY25, Q4 FY24
Credit costs rose to 55bps annualized, driven by delinquencies in lower-ticket credit cards and microfinance; management tightened norms but risk remains.
Mentioned in Q1 FY25, Q4 FY24
Management reiterated goal to reach mid-teens as a percentage of total advances once the RBI embargo is lifted.
Fast read
Guidance and risk preview
The 50 bps cut on savings deposits up to ₹5 lakh, effective Oct 17, is expected to add about 4 bps to NIM.
The tech embargo restricts digital onboarding for credit cards, limiting growth in unsecured retail and pressuring NIM.
View Risks →