Indian Banks

Kotak Mahindra Bank is keen on expanding its footprint in Uttar Pradesh

The bank, which has 13 operational branches in the state, will take up the tally to 16 in the next few months. The bank opened its second branch in Lucknow recently.

“We have presence in all the primary cities of the state and will now expand to other Tier II and III cities like Gorakhpur,” Kotak Mahindra Bank Group Head (Retail liabilities and branch banking) K V S Manian said at a conference call here recently.

“Pan-India, we are aiming a total branch network of 326 by the end of March 2011 from the current 245 at 141 locations,” he informed.

Manian said the bank wanted to proactively reach out to all segments of customers and strengthen its retail banking portfolio.

“We have already made a mark in the investment and personalised banking space and now want to expand our general customer base,” he said.

The bank would continue to follow the “multi channel” strategy for providing all the banking services viz online, home, phone and branch banking.

Besides, Kotak is looking “aggressively” at expanding its off-site ATM network, since the “profitability dynamics of ATMs has now changed due to the sharing of such infrastructure.”

“By the end of 2010-11 financial year, we are targetting total off-site ATM network of 500, especially in the top eight cities of the country,” he added.

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Backed by robust growth margin and fee-based income, Kotak Mahindra Bank on Thursday reported a 153 per cent rise in consolidated net profit at Rs 331.4 crore for the quarter ended December 2009 compared to Rs 130.9 crore a year age.

Consolidated total income for the quarter went up by 42.87 per cent to Rs 2,407.13 crore from Rs 1,684.74 crore in October-December 2008.

The private bank reported an improvement in net interest margin to 6.3 per cent for the December quarter from 5.9 per cent a year ago.

Other income also grew at a fast clip, partly reflecting the increase in fee-based revenues from corporate clients. For the group, fees and brokerage rose 119.2 per cent to Rs 1,222.43 crore in the quarter-ended December 2009.

What helped the bank’s bottom line was an improved performance by its subsidiaries whose businesses are aligned to the stock markets.

On standalone basis, during the third quarter, Kotak Mahindra Bank’s net profit doubled to Rs 142 crore from Rs 71 crore during October-December 2008.

The net interest income of the standalone entity rose 27 per cent to Rs 487 crore from Rs 383 crore, said Jaimin Bhatt, its group chief financial officer.

Bhatt said the cost of funds declined to around 5 per cent at end of December 2009 from 7-7.5 per cent a year ago. The share of low-cost current account and savings back account deposits in total deposits was estimated at 28 per cent.

The increase in auto, home loans and corporate credit helped to clock 23 per cent growth in consolidated advances to Rs 29,337 crore as against Rs 23,865 crore as on December 31, 2008.

Bhatt said the share of corporate credit has grown to 31 per cent and Kotak Mahindra Bank intended to maintain the share of corporate segment at one third in the total credit book.

Total assets managed or advised by the Kotak Mahindra Group as on December 31, 2009, was Rs 52,610 crore.

On a consolidated basis, the gross non-performing assets (NPAs) were estimated at Rs 1,108.48 crore (3.71 per cent of advances) at end of December 2009, as against Rs 865.63 crore (3.58 per cent) a year ago. In absolute terms, the increase was 28 per cent.

The net NPAs were Rs 572.54 crore (1.95 per cent) compared to Rs 561.41 crore (2.35 per cent). The incremental addition to NPAs had been less and there was improvement in repayment behaviour, Bhatt added.

The consolidated capital adequacy ratio was 20.5 per cent. For the standalone entity it was 17.01 per cent.

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Kotak Mahindra Bank is one of India’s leading financial private banking institutions. It offers banking solutions that covers almost every sphere of life. Some of its financial services include commercial banking, stock broking, mutual funds, life insurance and investment banking. Established under the brand of Kotak Mahindra Finance Ltd in 1984, it was given the license to carry on with banking business by the Reserve Bank of India in February 2003. It is the first company in the Indian banking history to convert to be converted from a private financial institution to a bank.

Branches and Business
Within a small span of 6 years, the bank has spread it wings in several sphere of finances. Presently, spread in 82 cities in India, the bank caters to the needs of its 5.9 million customers spread throughout the length and breadth of country and even abroad. By the end of FY 2007-2008, the Kotak Mahindra Bank had about 178 branches spread all over the country and it plans to add some more branches by the end of FY 2010.

The entire Kotak Mahindra group has a net worth of over Rs. 6,327 crore and at the end of FYP 2007-2008,it was reported that the consolidated profit of Kotak Mahindra Bank individually was Rs 991.2 crore which was 84% higher than the consolidated profit of Rs 538.2 crore in FY07. Kotak Mahindra Bank has 75 ATMs at 41 locations in the country which are 24×7 accessible. Before the free transactions facility of RBI was made mandatory to all the ATM operating banks in India from April 1, 2009, Kotak Mahindra Bank had underwent under a treaty with the HDFC Bank to provide free network free of cost to most of its customers through its 1335 ATMs spread in the country to ensure comfort to its customers.

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that’s when the company changed its name to Kotak Mahindra Finance Limited. Since then it’s been a steady and confident journey to growth and success. 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting

1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over FICOM, one of India’s largest financial retail marketing networks
1992 Enters the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into a separate company – Kotak Securities. Investment Banking division incorporated into a separate company-Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company – Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Group’s entry into information distribution.
1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to a commercial bank – the first Indian company to do so.
2004 Launches India Growth Fund, a private equity fund.
2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund
2006 Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities

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