Kotak Mahindra aims 20% credit growth in FY 2017

Sharath Chowdary

Kotak Mahindra Bank is planning to increase its number of branches to 1400 in India by the end of this fiscal year from 1333 branches as on 31 March 2016. The bank had only 684 branches in the country at the end of FY 2015.

Uday Kotak-led bank also aims at a 20 percent credit growth in FY 2017, the bank’s Senior Executive Vice President and Head - Branch Banking and Acquisition, Virat Diwanji told The Dollar Business.

He said, “The corporate credit offtake was slow in the recent times. The bank has registered 14-15 percent credit growth in the previous year. As interest rates are being reduced, some green shoots are coming up in the economic growth of the country. This is mainly due to the positive environment from the corporate India. We hope the credit demand will really rise in the second half of the year.”

When asked about the global expansion of the bank, the senior official of the bank said, “Currently, we are focusing in expanding our branches in India. We can inform about our international journey later.”

Explaining about the digital initiatives of the bank, Diwanji said, “Branch based transactions have decreased by 40 percent in FY 2016. More than 50 percent of the term deposits are made either online or through mobile application. The bank has recently acquired a 19.9 percent stake in Airtel M Commerce, the Payments Bank of Bharti Airtel, for Rs.98.4 crore.”

“Very soon, we are planning to introduce tablet phone banking for end-to-end needs of new account opening, in just one day. The bank is also getting ready to launch its own e-wallet product for digital payments by the month of August this year,” he revealed.

“Over one-third of the total asset portfolio comes under the corporate credit portfolio at Rs.118,000 crore. The banks total assets rose to Rs.192,260 crore in FY 2016 from Rs.106,012 crore in the previous fiscal. Net non-performing assets (NPA) are at 1.06 percent in FY 2016 against 0.92 percent in FY 2015. Net Interest Margin stood at 4.35 percent in FY 2016 from 4.76 percent in FY 2015. The bank’s profit after tax (PAT) increased to Rs.696 crore in FY 2016 from Rs.527 crore in the previous fiscal,” he informed.

“Though the interest rates are falling down in the banking sector, we will continue to offer 6 percent annual interest rate on savings account for balance above Rs.1 lakh and 5 percent interest for balance up to Rs.1 lakh,” he said.