Tag: kotak mahindra bank news

Uday Kotak’s tenure at IL&FS helm extended by six months

Banking & Finance

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CS Rajan, managing director of IL& FS, hailed the move and said under Kotak’s continued leadership, IL&FS will accomplish the resolution targets.

The government has extended the term of Kotak Mahindra Bank managing director Uday Kotak as the non-executive chairman of the IL&FS group by six months through April 2, 2022.

In a gazette notification, the Department of Financial Services said: “…whereas the Central government, on the recommendations of the Reserve Bank of India, has considered it necessary to grant said exemption to Kotak Mahindra Bank Limited for a further period of six months with effect from the 3rd day of October, 2021.”

According to the Banking Regulation Act, a bank cannot be managed by any person who is a director of any other company. He can be granted a temporary exception for three months or nine months with the approval of the RBI.

The Centre had appointed Kotak as the head of the lender’s board in 2018 to help the debt-laden firm come out of stress, after the government took over the board. He was initially allowed to be at the helm of IL&FS for three months, which was extended by nine months. Subsequently, he got two extensions of one year each.

CS Rajan, managing director of IL& FS, hailed the move and said under Kotak’s continued leadership, IL&FS will accomplish the resolution targets.

In fact, following the Evergrande crisis in China, Kotak had tweeted on September 21 that the trouble at the property developer seems like China’s Lehman moment and reminds him of IL&FS.

He tweeted: “Indian Government acted swiftly. Provided calm to financial markets. The Government appointed board estimates 61% recovery at IL&FS.”

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Will continue to be MD & CEO of bank till Dec 2023: Uday Kotak

Banking & Finance

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Uday Kotak had sold 56 million shares held by him in the bank for at least Rs 6,913.75 crore through a block deal to reduce his stake to 26%.

Kotak Mahindra Bank’s MD and CEO Uday Kotak on Monday said he would be with the bank at least till his term ends. On his succession plans, Kotak said the bank’s board would act in a manner which is appropriate and responsible.

The comments from Kotak came after the Reserve Bank of India (RBI) issued guidelines that the MD and CEO of a private bank cannot have a tenure of more than 15 years. RBI had earlier approved the re-appointment of Uday Kotak as MD & CEO of Kotak Mahindra Bank for three years in December 2020.

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“Right now, my tenure is till December 2023 and you are going to see me at least till then,” Kotak said. He said succession planning is a continuous process for any institution. “Our board members are fully aware of their responsibilities and they will act in a manner, which is appropriate and responsible.” he added.

Kotak had a prolonged disagreement with the central bank over his personal holding in the private lender. He had moved the Bombay HC in December 2018 against an RBI diktat on reducing promoter holding to 15% by March 2020. The matter was resolved after RBI allowed the promoter stake to be reduced to 26%.

Uday Kotak had sold 56 million shares held by him in the bank for at least Rs 6,913.75 crore through a block deal to reduce his stake to 26%.

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Kotak Mahindra Bank net jumps 33% to Rs 1,682 crore

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(Representational image)

Kotak Mahindra Bank on Monday reported a 33% year-on-year (y-o-y) jump in its net profit to Rs 1,682 crore for the quarter ended March because of higher net interest income (NII). The bank was able to register growth in the bottom line despite a 181% quarter-on-quarter (q-o-q) and 13% y-o-y jump in provisions to Rs 1,179 crore. The operating profit increased 25% y-o-y to Rs 3,407 crore as the net interest income (NII) grew 8% y-o-y to Rs 3,843 crore.

Uday Kotak, MD and CEO, said, “I hope the Covid-19 situation is short lived and it will be like the UK, where it sharply went up and then came down sharply too.” The bank has decided to curtail deployment of employees in non-essential activities, including physical collections for a week at least, due to Covid-19 situation. “Yes, it is a risk that the bank is taking for short term but people balance sheet is more important to us,” Kotak said.

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The net interest margins (NIM) declined 33 basis point (bps) y-o-y and 12 bps sequentially to 4.39%.

The asset quality improved during the March quarter. Gross non-performing assets (NPAs) ratio improved 2 bps to 3.25%, compared to reported proforma gross NPAs of 3.27% in the previous quarter. Similarly, net NPAs ratio improved 3 bps to 1.21% from 1.24% in the December quarter. Lenders had reported NPAs on a proforma basis during the December quarter due to a standstill from apex court on declaring NPAs.

Fee and service income grew 23% q-o-q and 9% y-o-y to Rs 1,378 crore. Overall, other income grew 31% y-o-y to Rs 1,949 crore.

Advances grew 4.5% q-o-q and 1.8% y-o-y to Rs 2.23 lakh crore. The lender has registered a 10% y-o-y growth in home loan. The bank does not plan to raise home loan rates as of now. It continues to be conservative in unsecured retail business.

Deposits grew 6% y-o-y as well as sequentially to Rs 2.8 lakh crore. Current account savings account (CASA) ratio as on March 31, 2021 stood at 60.4%, compared to 56.2% in the March quarter last year.

The capital adequacy ratio (CAR) stood at 22.3% with CET1 ratio of 21.4% at the end of March 2021.

The board has recommended dividend of Rs 0.9 per equity share for the year ended March 31, 2021, subject to approval of shareholders.

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