Tag: Kotak Mahindra Bank

Kotak Mahindra Bank picks up 9.99% stake in Ferbine Private Ltd

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Private sector lender Kotak Mahindra Bank has acquired a 9.99 per cent stake in Ferbine Private Limited, which plans to apply to the Reserve Bank of India to set-up a pan-India umbrella entity (PUE) for retail payments.

“We wish to inform you that Kotak Mahindra Bank has agreed to subscribe to 4,995 equity shares in Ferbine Private Limited for a consideration of ₹49,950, translating into an equity shareholding of 9.99 per cent on February 25, 2021,” the lender said in a regulatory statement on Thursday.

Ferbine Private Limited was incorporated on January 18, 2021 to make an application to RBI for the PUE license, it further said.

“The main business of the company would be to operating a pan-India umbrella entity for retail payment systems, as would be allowed/licensed by RBI, subject to the approval of the PUE application,” the bank said.

The promoter of Ferbine is Tata Sons Private Ltd, Farida Khambata, a director of the Bank is also on the board of Tata Sons Ltd.

The acquisition in Febrine Private Limited by Kotak Mahindra Bank is likely to be completed on or before February 26, 2021.

“It may be noted that the Bank may participate in future capital raise by Ferbine,” the bank said.

The announcement comes just ahead of the RBI deadline for accepting applications for an umbrella entity for retail payments by February 26, 2021.

Earlier, So Hum Bharat Digital Payments had announced that it is in talks with private sector lender Yes Bank for a 9.99 per cent equity investment and will work together on the proposed new umbrella entity (NUE).

Other banks are also understood to be evaluating and applying to the RBI under the guidelines.

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Kotak Mahindra Bank announces launch of Kotak Remit on mobile, BFSI News, ET BFSI

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NEW DELHI: Kotak Mahindra Bank on Monday announced the launch of its outward forex remittance service, Kotak Remit, on mobile that will allow users to send money abroad directly from their mobile phones.

The outward forex remittance solution is live on the Kotak Mobile Banking App.

For the first time, Kotak customers can conveniently transfer money internationally to their beneficiaries straight from their mobile, Kotak Mahindra Bank said in a release.

The private sector lender said that it is an industry-first move, and customers will not have to furnish any physical documents for transactions up to USD 25,000 or equivalent seamlessly to permissible geographies across the world.

“The mobile has been at the centre of a revolution of sorts and it has changed the way we bank, invest, shop and pay.

“Domestic payments has been one of the core areas of focus. With the launch of Kotak Remit on mobile, we have entered a new phase of digital transformation encompassing international payments, which gives our customers the advantage of banking on mobile for making international fund transfers as well,” said Phani Shankar, President & Co-Head – Treasury & Global Markets, Kotak Mahindra Bank.

Kotak Remit offers remittances in 15 currencies including the US dollar, Australian Dollar, UK Pound Sterling, Hong Kong Dollar, Saudi Riyal, Canadian Dollar, Singapore Dollar, Euro, Japanese Yen.

By entering transfer details and beneficiary details, customers can remit up to USD 25,000 or equivalent per day and up to USD 250,000 or equivalent in a financial year through Kotak Remit.

Customers will receive a notification at every stage of the transaction process, keeping them updated and can also save beneficiary details to facilitate quick repeat remittances.

While outbound remittances under the Liberalised Remittance Scheme (LRS) for resident individuals has seen a decline this year owing to the pandemic, remittances from India have been consistently growing prior to FY 2020-21 and presents a significant market opportunity, said the bank.

In 2019-20, outbound remittances from India grew by nearly 36 per cent to USD 18.8 billion in 2019-20, from USD 13.8 billion in 2018-19.



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NHAI, BFSI News, ET BFSI

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The amount of fraudulent transactions from the NHAI accounts with Kotak Mahindra Bank’s Exhibition Road branch in Patna has increased to Rs 32 crore and may be more against the initial claim of Rs15 crore by Patna police, sources said.

However, Patna police officers are tight-lipped on the matter. More than a month have passed since the fraud was detected on January 2. Only four persons, including former manager of Exhibition Road branch, Sumit Kumar, have been arrested so far.

The fraudulent transactions came to light after one Shubham Kumar Gupta (28) of Jehanabad the branch on January 2 to make an RTGS transfer of Rs11.73 crore from the NHAI account to another bank account.

But the Patna police is still not clear about the total amount of fraudulent withdrawal or the time period of the fraud. When asked, Town DSP Suresh Kumar told TOI over the phone on Saturday that as per his information, the amount transacted fraudulently from the NHAI bank account is Rs28 crore.

“Bank authorities are conducting internal audit after which police will get to know the complete details. However, I have asked the bank to provide a report by Monday,” he said, adding that the bank authorities are expert of audit and not the police.

NHAI regional officer Colonel (retired) Chanda Vats told TOI that fraudulent transactions of Rs32 crore from NHAI accounts have come to light. He said Rs32 crore might only be a tip of the total amount withdrawn fraudulently and more could come to light in future.

“The bank authorities are not cooperating with us. They have not provided us reconciliation statement yet, even though we have sought it,” he said.

Vats also said the fraudulent transactions had taken place actually from two separate NHAI accounts, both with Kotak Mahindra Bank’s Exhibition Road branch. He said one account is for Mokama-Bakhtiyarpur national highways project and another is for Patna-Gaya NH project.

“These bank accounts are opened by joint signature of the project director and the district land acquisition officer (DLAO) concerned. The account is later handled by the DLAO. All disbursals to the beneficiaries concerned against their acquired land are made by the DLAO’s signature,” Vats said.

Vats said he will call the bank’s higher authorities to cooperate with NHAI and give details of all transactions or “we would write to NHAI headquarters urging not to do business with them in future”.

Patna DM Chandrashekhar Singh, when contacted, had found no discrepancies from the district administration side. “DLAO transferred from the bank account only to the beneficiaries against land acquisition,” he had said and added: “Report could be taken from NHAI. Only they can tell what has happened with the accounts.”



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Govt must think of many AIFs, rather than one bad bank: Kotak

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Instead of setting up just a single bad bank, the Centre should consider floating multiple such outfits in the form of Alternate Infrastructure Funds, Uday Kotak, Managing Director and CEO, Kotak Mahindra Bank, and President, Confederation of Indian Industry, said. The veteran banker also suggested the setting up of a development financial institution for infrastructure, while speaking at BusinessLine’s Countdown to Budget 2021 event on Wednesday.

“One of the suggestions we have made from the CII is rather than thinking about just one single bad bank, where you have a big challenge of clearing price, allow floatation of multiple bad banks in the form of Alternate Infrastructure Funds registered under SEBI. They should also be allowed to buy, in addition to securities, loans from banks and NBFCs balance-sheets and to be considered as part of the permitted activity for AIFs,” Kotak said while delivering the keynote address at the HDFC Bank powered conference themed ‘Unleashing the animal spirit in a pandemic hit economy’ .

‘Needed, a DFI’

He also suggested setting up of a development financial institutions.“The reason is if you look at NABARD, which has been a success in rural and agriculture, or SIDBI in the area of MSMEs, the time has come for a massive infra push for India’s growth transformation and through that creating a reverse demand for various other products and services. A DFI, with a creative way of funding that institution with long-term money, is something that may be appropriate,” he said.

Budget 2021-22, which is being presented amidst the Covid-19 pandemic, is not just about arithmetic but also about being a policy document that spells out a new future for the country, Kotak said.

“We are in the best of times, the worst of times…the pandemic is a once-in-a-hundred year event. For all the challenges it has created to lives and livelihood, it is also the best time for us to grasp the opportunity of a transforming world economy, Indian economy, and society,” Kotak said.

Five focus areas

He underlined five key focus areas that the Budget should focus on. These include infrastructure, healthcare, education, sustainability, and defence. Additionally, there is a need for a continued push in three areas of private investments, jobs and digitisation.

Finance Minister Nirmala Sitharaman, who will present the Budget on February 1, has promised a “never before” like Union Budget as the government looks to boost growth amidst the pandemic.

“I genuinely hope this Budget will live up to the expectation that it is a Budget like never before,” Kotak said.

He also called for a gradual normalisation of the fiscal deficit over a three-year period and recommended a stable tax and interest rate regime.

 

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Kotak Mahindra Bank’s net profit increases 16%, asset quality improves

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The bank’s net interest income (NII) increased 17% y-o-y and 2.4% q-o-q to Rs 4,007 crore.

Private lender Kotak Mahindra Bank’s net profit grew 16% year-on-year (Y-o-Y) to Rs 1,854 crore during the December quarter (Q3FY21) on higher interest income and better asset quality. The lender was able to register a growth in the bottom line despite a 35% y-o-y and 62.5% quarter-on-quarter (q-o-q) jump in the provisions and contingencies to Rs 599 crore. Pre-provision operating profit (PPOP) of the lender surged 29.1% y-o-y to Rs 3,083 crore but declined 6.5% sequentially.

Dipak Gupta, joint managing director, Kotak Mahindra Bank said that the lender was witnessing momentum in the selected pockets. “We need to watch a few segments before pressing the accelerator. At this point of time the foot has moved from the brake to accelerator on the secured products,” Gupta said.

The bank’s net interest income (NII) increased 17% y-o-y and 2.4% q-o-q to Rs 4,007 crore.

The asset quality of the bank showed an improvement in Q3FY21. The gross non-performing assets (NPAs) improved 29 basis points (bps) to 2.26%, compared to 2.55% in the previous quarter. Similarly, net NPAs came down 14 bps to 0.5% from 0.64% in the September quarter. The bank has not classified any NPAs since August 31, 2020, due to the interim order of Supreme Court. The apex court had earlier directed lenders not to recognise fresh NPAs, till further orders in the interest-on-interest case.

“Had the bank classified the borrowers more than 90 days overdue on December 31, 2020, as NPA, GNPA would be 3.27% and net NPA would be 1.24%,” said Jaimin Bhatt, president and group chief financial officer, Kotak Mahindra Bank. The bank has, however, made provision for such advances, he added.

Kotak Mahindra Bank’s Covid-19-related provisions as of December 2020 stood at Rs 1,279 crore. The lender said that a very small number of borrowers opted for one-time restructuring. “Following the resolution framework for Covid-19 announced by Reserve Bank of India (RBI) on August 6, 2020, as at December 2020, the bank has approved, for certain eligible borrowers, one-time restructuring of 0.28% of net advances,” the bank said. The Reserve Bank of India (RBI) had earlier allowed one-time restructuring for borrowers impacted by Covid-19

The net interest margins (NIMs) declined 18 bps y-o-y to 4.51% but remained flat sequentially. Advances during the December quarter were down 1.2% y-o-y at Rs 2.14 lakh crore but reported a 4.5% sequential growth. Deposits grew by 10.8% y-o-y and 1.4% q-o-q to Rs 2.65 lakh crore in the December quarter. The current account-savings account (CASA) ratio as on December 31, 2020, stood at 58.9%, compared to 53.7% as on December 31, 2019. The capital adequacy of the lender remained at 21.5% as on December 31, 2020.

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Net profit rises 16% to Rs 1,853.5 crore; NII up 17%, BFSI News, ET BFSI

Banking & Finance

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MUMABI: Kotak Mahindra Bank today reported a net profit of Rs 1,853.5 crore as against Rs 1,595.90 crore, reflecting a growth of 16 per cent on a year-on-year basis.

The lender reported a gross non-performing assets ratio of 2.26 per cent for the reported quarter as against 2.55 per cent in the previous quarter.

Notwithstanding the Supreme Court’s standstill on bad loan recognition, the lender said that the gross NPA ratio would have stood at 3.27 per cent in the December quarter and net NPA ratio would have been at 1.24 per cent.

The lender’s net interest income rose 17 per cent on year to Rs 4,007 crore, while the net interest margin was largely stable on year at 4.51 per cent.

The private sector bank reported a 4.5 per cent sequential growth in advances in the quarter to Rs 2.14 lakh crore, which fared better than most peers who have reported earnings so far. However, on a year-on-year basis the lender’s loan book fell 1.2 per cent reflecting the conservative strategy adopted by the bank since onset COVID-19 pandemic.

Kotak Bank said that its Covid-related provisions stood at Rs 1,279 crore as on December 31, while it has approved restructure of loans under the special recast window provided by the Reserve Bank of India to the tune 0.28 per cent of net advances.

The bank said that proforma net non-performing assets at the end of the December quarter stood at Rs 2,646 crore with provisions worth Rs 2,262 crore held against them.

The lender reported strong operating performance in the quarter as the operating profit jumped 29 per cent year-on-year to Rs 3,083 crore.



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Kotak Mahindra Bank Q3 net profit up 16%

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Private sector lender Kotak Mahindra Bank reported a 16.1 per cent increase in its standalone net profit at ₹ 1,853.54 crore for the third quarter this fiscal as against ₹ 1,595.90 crore in the same period last fiscal.

Net interest income for the quarter ended December 31, 2020 rose by 17 per cent to ₹ 4,007 crore, from ₹ 3,430 crore a year ago. Net interest margin for the quarter under review was at 4.51 per cent.

Other income was almost flat at ₹ 1,334.38 crore (₹ 1,341.43 crore).

Provisions soared by 34.9 per cent to ₹ 599.03 crore in the third quarter this fiscal as against ₹ 444 crore a year ago.

“Covid related provisions as at December 31, 2020 stood at ₹ 1,279 crore,” the bank said in a statement on Monday.

In accordance with the Resolution Framework for Covid-19 announced by RBI on August 6, 2020, as at December 31, 2020, the bank has approved, for certain eligible borrowers, one-time restructuring of 0.28 per cent of net advances, it further said.

As at December 31, 2020, gross non performing assets was 2.26 per cent and net NPA was 0.50 per cent.

Had the bank classified the borrowers more than 90 days overdue on December 31, 2020 as NPA, gross NPA would be 3.27 per cent (September 30, 2020: 2.70 per cent); net NPA would be 1.24 per cent (September 30, 2020: 0.74 per cent), it further said, adding that it has made provision for such advances including towards interest accrued but not collected for the entire period, with moratorium.

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Nifty Bank & financials trade in green; ICICI, Kotak Mahindra Bank top gainers, BFSI News, ET BFSI

Personal Finance

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Nifty bank index traded at Rs 31,797 adding 0.24%, while BSE Bankex ended at 36,396 adding 0.34%. Shares that contributed the most were – RBL Bank at Rs 284 adding 5.40% followed by ICICI Bank at Rs 546 (1.80%), SBI at Rs 284 (1.12%), Kotak Mahindra Bank at Rs 1,970 (0.55%), federal Bank at Rs 72 (0.55%). While all the other major indices remained green, Axis Bank at Rs 654 (-1.48%) and HDFC Bank traded lower at Rs 1,420 (-0.43%).

Nifty Financial Services ended at 15,393 adding 0.09%. Indiabulls HSG was the top gainer at Rs 220 adding 0.32% followed by Power Finance at Rs 118 (0.13%). Shares that traded lower were- Bajaj Finance at Rs 5,030 (-1.73%), Cholamandalam at Rs 434 (-0.55%) and HDFC at Rs 2,638 (-0.49%).

Other key takeaways

India receives highest FII inflows in 2020
Indian equities received more than Rs 1.6 lakh crore ($23 billion) from foreign institutional investors in 2020, the highest among emerging markets. In fact, most Asian and emerging markets witnessed outflows in the year gone by. This was the second year in a row when FII inflows into Indian equities were highest among emerging markets. In 2019, the inflow was $14.2 billion.

Bitcoin breaks above $35,000 to touch new high
Bitcoin traded above $35,000 for the first time in Asia on Wednesday, rising to a high of $35,879 and extending a rally that has seen the digital currency rise more than 800% since mid-March.The world’s most popular cryptocurrency crossed $20,000 for the first time ever on December 16.

Rupee trades flat
Indian rupee erased the gains and trading flat at 73.18 per dollar, amid selling seen in the domestic equity market. It opened flat at 73.17 per dollar against Tuesday’s close of 73.17.

Gold Updates
On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.31 percent at Rs 51,561 per 10 gram at 0920 hours. March silver was trading 0.72 percent lower at Rs 70,346 a kilogram.

Gold has support at 51440-51200 and resistance is placed at 52000-52200 levels. Silver has support at 70200-69500 while resistance is placed at 71500-72200 levels. Gold and silver extend gain on Tuesday amid weakness in the dollar index and 7-weeks lockdown in the UK. Both the precious metals were settled on a positive note.



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