Tag: Kotak Mahindra Bank

Kotak Mahindra Bank completes acquisition of 10 pc stake in KFin Tech, BFSI News, ET BFSI

Banking & Finance

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Kotak Mahindra Bank on Wednesday said it has completed the acquisition of a nearly 10 per cent stake in KFin Technologies for around Rs 310 crore. In September, the bank had informed about subscribing to 1,67,25,100 equity shares in KFin Technologies Pvt Ltd for a consideration of approximately Rs 310 crore, translating into an equity shareholding of 9.98 per cent.

“We would like to inform you that the bank has completed the said transaction on November 10, 2021,” Kotak said in a regulatory filing.

General Atlantic-backed KFin Technologies is an investor and issuer serving platform that provides financial technology solutions across asset classes like mutual funds, alternatives, insurance, and pension.

It serves 25 mutual funds and has a 35 per cent share in equity assets under management.

Kotak stock closed at Rs 2,076.80 apiece on BSE, down 0.97 per cent from the previous close. PTI KPM BAL BAL



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Credit card spends sparkle on festive rush in October, November, BFSI News, ET BFSI

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Credit card spends are seen hitting record highs in October and November as the COVID-19 wave ebbs and festive euphoria sets in. As per trends, it has grown 17 per cent in October and 11 per cent in November.

Spending traction is evident from the record absolute spends and the ratio of credit card to debit card spend, which stands at 1.28x. October is likely to be 15-18% better than September while November’s first-week run rate has been better than October, according to ICICI Securities.

September jump

Credit card spends jumped 60 per cent year-on-year (YoY) in September, helped by the onset of the festive season. However, on a sequential basis the growth slowed down to 3 per cent at Rs 80,500 crore in September.

Spends grew strongly at 60% year on year (+16% on a two-year CAGR basis). Kotak Mahindra Bank reported the highest growth (27% MoM) in September, followed by IndusInd Bank and ICICI Bank (13% each).

Other major players reported growth in the +-4% range. On a two-year CAGR basis, spends for ICICI Bank grew 58%, IndusInd 33%, Kotak Mahindra Bank 29%. HDFC Bank and SBI Cards posted growth of 10–15% and Axis Bank and SCB 2–3%. On the other hand, Citi and Amex saw declines of 8% and 26% respectively. ICICI Bank surpassed SBI Cards to become the second-largest player in spends, with market share of 19.3% over 6MFY22.

Outstanding credit cards up 10.8%

The total number of outstanding credit cards in the system grew 10.8% YoY to 65 million in September 2021 – the highest in the past 11 months. Among the major players, ICICI Bank reported strong growth of 26.1% YoY, followed by IndusInd Bank (15.6%), SBI Cards (14.3%). Foreign players such as American and Citi witnessed decline of 10% and 5% respectively. SBI Cards and ICICI Bank continued to perform strongly, resulting in a 59–218 bps YoY increase in market share to 19.3% and 18.0% respectively in September.

ICICI Bank added close to 2 million new cards in the past 10 months, taking its credit card base to 11.6 million as of September. Despite a 247 bps year on year decline, HDFC Bank remained the largest player with a market share of 23.0%.

Around 10.91 lakh new cards were added to the system in September with HDFC Bank being the largest acquirer at 2.44 lakh cards.



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Hiring in banks up 25% to cater to rising loan demand, BFSI News, ET BFSI

Banking & Finance

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Banks are stepping up hiring to cater to the growing demand for home loans. Hiring has gone up 22-25% in the last few months across urban and rural markets as demand for home loans has surged, according to various reports.

About 90 per cent of the requirement is in the sales function, with starting salaries of Rs 15,000 to Rs 20,000, along with incentives. Hiring is across the board at NBFCs, small finance banks and non-banking finance companies, and hiring costs are rising as employees are shifting jobs within the sector.

NBFCs

Shriram Group is hiring 5,000 across its many companies, while ICICI Home Finance is looking to onboard 600 employees by December.

The Shriram Group is recruiting mainly in south and north India, across tier 3-4 cities. Shriram City Union Finance is expanding its gold loan business,

while Shriram Housing Finance is expanding primarily in Andhra Pradesh and Telangana.

Banks

HDFC Bank is aiming to reach 200,000 villages in the next 24 months, and plans to hire more than 2,500 people in the next six months.

The bank aims to double its presence in the next 18-24 months through a combination of branch network, business correspondents, business facilitators, CSC (common service centres) partners, virtual relationship management and digital outreach platforms.

The bank will hire 500 relationship managers to expand the coverage of its Micro, Small and Medium Enterprises (MSME) vertical to 575 districts or more by the end of this fiscal. Out of these, half will be for the small and medium sub-vertical, which already has a headcount of 975. This hiring will take the private bank’s MSME vertical headcount to 2,500. India’s largest private sector lender had an employee strength of around 1.23 lakh as of June.

Credit Suisse has plans to hire over 1,000 staff in India this year for a technology innovation office, while Deutsche Bank is looking to hire 1,000 people in India, including 300 graduates and 700 lateral hires. Meanwhile, Kotak Mahindra Bank has resumed its hiring process, and has reached near pre-Covid levels.

Data analysts

From banking to FinTech companies, data analysts are in demand. These companies are looking for professionals who can handle data using technology and glean relevant information from it.

FinTechs are also beefing up marketing and sales teams and are looking beyond commerce and engineering backgrounds with a background in data analysis, artificial intelligence and exceptional soft skills. They are looking to pay higher salaries who have Big Data, advanced analytics and financial skills.



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Kotak Mahindra Bank launches home loans with interest rate starting 6.55%, BFSI News, ET BFSI

Banking & Finance

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Kotak Mahindra Bank today announced a new home loan interest rate of 6.55% p.a., which. The interest rate is valid from Tuesday to 10th December, both days inclusive, and is applicable for fresh loans and balance transfers.

It is available across all loan amounts and is linked to a borrower’s credit profile.

Further, applicants who have received a home loan sanction letter from the bank by today can lock in the earlier rate starting at 6.50% p.a. if the loan is disbursed in the next seven days i.e. by November 15.

Earlier in September, the bank had introduced home loan interest rates beginning 6.50% p.a. – a festive season offer that ends today.

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Kotak Mahindra Bank announces new home loan interest rate at 6.55%

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Kotak Mahindra Bank on Monday announced a new home loan interest rate of 6.55 per cent per annum.

The new rate is valid from November 9 to December 10, it said in a statement, adding that it is applicable for both fresh home loans and balance transfers.

The lender had kick-started the festive season by introducing home loan interest rates beginning at 6.5 per cent per annum, which was a limited period festive season offer that ends on Monday.

“Further, applicants who have received a home loan sanction letter from Kotak Mahindra Bank by November 8 can lock in the earlier rate starting at 6.5 per cent per annum if the loan is disbursed in the next seven days – by November 15,” the bank further said.

Ambuj Chandna, President, Consumer Assets, Kotak Mahindra Bank said, “Our special 60-day festive season offer has been deeply appreciated by home buyers and we have seen very strong demand momentum – both in fresh cases and balance transfers. We are, hence, delighted to extend the good times for borrowers with a new home loan rate.”

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M-cap of eight of top-10 most-valued companies jumps over Rs 1.18 lakh cr, BFSI News, ET BFSI

Personal Finance

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New Delhi, Nov 7 (PTI) Eight of the top-10 most valued companies together added Rs 1,18,930.01 crore in market valuation last week, with Tata Consultancy Services and State Bank of India (SBI) emerging as the lead gainers. Last week, the BSE benchmark gained 760.69 points or 1.28 per cent.

A special one-hour Muhurat trading session was held on Diwali (November 4) to mark the beginning of the traditional Hindu calendar year, called ‘Vikram Samvat’.

Markets were closed on Friday on the occasion of ‘Diwali Balipratipada’.

Reliance Industries Ltd and ICICI Bank were the only laggards from the top-10 list.

The market valuation of Tata Consultancy Services zoomed Rs 40,782.04 crore to reach Rs 12,98,015.62 crore.

SBI added Rs 25,033.54 crore taking its valuation to Rs 4,73,406.02 crore.

The valuation of Infosys jumped Rs 17,158.49 crore to Rs 7,18,890.08 crore and that of HDFC gained Rs 10,153.08 crore to Rs 5,24,370.77 crore.

Bajaj Finance added Rs 7,502.68 crore taking its valuation to Rs 4,54,304.34 crore.

The market capitalisation (m-cap) of Hindustan Unilever Ltd jumped Rs 6,978.29 crore to Rs 5,69,458.69 crore and that of HDFC Bank rallied Rs 6,453.41 crore to Rs 8,82,981.83 crore.

Kotak Mahindra Bank‘s valuation went higher by Rs 4,868.48 crore to Rs 4,07,881.48 crore.

In contrast, the market capitalisation of Reliance Industries Ltd (RIL) declined Rs 24,612.17 crore to Rs 15,85,074.58 crore.

ICICI Bank’s valuation dipped Rs 13,680.32 crore to Rs 5,42,827.39 crore.

In the ranking of top-10 firms, RIL remained the most-valued company, followed by Tata Consultancy Services, HDFC Bank, Infosys, Hindustan Unilever Limited, ICICI Bank, HDFC, State Bank of India, Bajaj Finance and Kotak Mahindra Bank.



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Credit card spends jump 60% in September, set for further festive push, BFSI News, ET BFSI

Banking & Finance

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Another option, if you are unable to make payments by the due date, is opting for a loan against your credit card. Various credit card companies offer pre-approved loans to customers, these can actually come in handy in this scenario. However, be mindful of the costs as the interest rate and other charges may be steeper. If you have multiple credit cards, compare interest rates and processing fees on each and go with the one that has least total cost for your preferred loan tenure.

Credit card spends jumped 60 per cent year-on-year (YoY) in September, helped by the onset of the festive season.

On a sequential basis, the growth slowed down to 3 per cent at Rs 80,500 crore, according to various research reports.

The festive season, opening up of the economy and rising consumer confidence is set to keep the credit card spends buoyant, experts say.

Kotak Mahindra Bank reported the highest growth (27% MoM) in September, followed by IndusInd Bank and ICICI Bank (13% each). Other major players reported growth in the +-4% range. On a two-year CAGR basis, spends for ICICI Bank grew 58%, IndusInd 33%, Kotak Mahindra Bank 29%. HDFC Bank and SBI Cards posted growth of 10–15% and Axis Bank and SCB 2–3%. While, Citi and Amex saw a decline of 8% and 26%, respectively. ICICI Bank surpassed SBI Cards to become the second-largest player in spends, with market share of 19.3% over 6MFY22.

Outstanding credit cards up 10.8%

The total number of outstanding credit cards in the system grew 10.8% YoY to 65 million in September 2021 – the highest in the past 11 months.

Among the major players, ICICI Bank reported strong growth of 26.1% YoY, followed by IndusInd Bank (15.6%), SBI Cards (14.3%). Foreign players such as American and Citi witnessed declines of 10% and 5% respectively. SBI Cards and ICICI Bank continued to perform strongly, resulting in a 59–218 bps YoY increase in market share to 19.3% and 18.0% respectively in September.

ICICI Bank added close to 2 million new cards in the past 10 months, taking its credit card base to 11.6 million as of September.

Despite a 247 bps year on year decline, HDFC Bank remained the largest player with a market share of 23.0%.

10.91 lakh card adds

Around 10.91 lakh new cards were added to the system in September with HDFC Bank being the largest acquirer at 2.44 lakh cards. ICICI Bank added 2.34 lakh, Axis Bank added 2.03 lakh, while SBI Cards added 1.75 lakh cards in September, while, Standard Chartered Bank, AMEX and Citi posted a decline of 13,000, 11,000 and 4,500, respectively, in the card base. IDFCF Bank also posted a strong performance with 39,000 new credit card additions in September.

Higher spends per card

Monthly spends per card for the industry increased to Rs 12400, from an average of Rs 10,700 over the past six months (higher v/s pre-Covid levels). This was attributable to an increase in the ticket size to Rs 4,300, the highest in the past several years.

Conversely, the number of transactions per card declined to 2.8 v/s 3.0 in August (3.1 in March). IndusInd and Kotak Mahindra Bank saw a higher increase of Rs 2,400 and Rs 2,200, respectively, followed by ICICI Bank with Rs 1,400.

IndusInd (Rs 9,700) and Amex (Rs 5,900) had the highest ticket sizes, followed by Kotak Mahindra Bank (Rs 5,100) and ICICI Bank (Rs4,900). All other players were in the range of Rs 3,900–Rs 4,300 – barring Citi and SCB, which were lower at Rs 3,000–3,200.



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Bank, card firms receive 2 million auto-debit mandates after RBI order, BFSI News, ET BFSI

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Banks and card networks have received nearly two million auto-debit mandates after the Reserve Bank of India (RBI) made it mandatory from October 1 to take prior consent of a customer before debiting their accounts.

Most of the recurring payments are linked to credit cards, while such a facility is not available in most places for debit cards.

In August, total credit card transactions stood at 19 million, and debit card transactions at 358.5 million. In value terms, credit cards were at Rs 77,732.94 crore and debit cards at Rs 64,351.52 crore.

The readiness

State Bank of India, Axis Bank, HDFC Bank, Yes Bank, American Express, Bank of India, Bank of Baroda, ICICI Bank, HSBC, RBL Bank, IndusInd Bank and Kotak Mahindra Bank have implemented the recurring payment framework for their customers.

Canara Bank, Punjab National Bank and Standard Chartered Bank are making necessary system changes to allow e-mandates based transactions.

Service providers such as Razorpay, Billdesk, PayU have come up with solutions to help card issuers, customers, and merchants to register their mandates on their customised platforms. BillDesk has set up SI Hub, PayU has created Zion while Razorpay has set up MandateHQ.

RBI’s auto-debit rule

Under the new auto-debit rules that kicked in on October 1, there are no automatic recurring payments for services like recharge, utility bill as the additional factor of authentication (AFA) has now become mandatory.

To ensure safety and security of card transactions, the central bank had, in December last year, directed all banks that processing of recurring transactions (domestic or cross-border) using cards or Prepaid Payment Instruments (PPIs) or Unified Payments Interface (UPI) under arrangements/practices not compliant with AFA would not be continued beyond March 31, 2021.

However, non-readiness of some of the players had forced the RBI to extend the deadline on recurring payment till September 30. The rule is applicable to all types of recurring payments like utility bills, phone recharge, DTH and OTT, among others.

As per the guidelines, banks will send a one-time password (OTP) to customers for payments above Rs 5,000.



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Healthy growth in home loans, may consider extending festive offer: Kotak Mahindra Bank

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Private sector lender Kotak Mahindra Bank has seen robust growth in home loan demand and said it may consider extending the festive season rates depending on the interest rates and demand.

The bank had with effect from September 10 reduced home loan rates by 15 basis points to 6.5 per cent per annum. The offer is scheduled to end on November 8.

“Overall, growth has been healthy in the home loan segment. If the demand momentum continues and depending on how the interest rates behave, we may consider extending it,” said Dipak Gupta, Joint Managing Director, Kotak Mahindra Bank on Tuesday in a media call after the lender’s second quarter results.

Gupta said a third of the portfolio is from balance transfer.

“It is difficult to say how much is coming from rate cut and how much is organic. In general, the demand for homes and home loans have gone up. There is an element of balance transfer also in this, which probably is driven by 6.5 per cent interest rate,” he said.

The bank’s home loans and loan against property segment grew by 28.8 per cent to ₹61,479 crore in the second quarter of the fiscal from ₹47,732 crore a year ago. On a sequential basis, it grew by 10.5 per cent from ₹55,623 crore as on June 30, 2021.

Overall, the bank’s customer assets, which includes advances and credit substitutes, increased by 17 per cent to ₹2,56,353 crore as at September 30, 2021 from ₹2,18,790 crore as at September 30, 2020.

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Kotak Mahindra Bank Q2 net down 7%

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Private sector lender Kotak Mahindra Bank reported a seven per cent year-on-year (y-o-y) drop in its standalone net profit for the second quarter of the fiscal due to higher provisions. For the quarter-ended September 30, the bank’s standalone net profit stood at ₹2,032.01 as against ₹2,184.48 crore in the same period last fiscal. However, on a sequential basis, its net profit increased by 24 per cent from ₹1,642 crore for the first quarter of the fiscal.

Its net interest income increased three per cent to ₹4,021 crore in the second quarter of the fiscal from ₹3,897 crore a year ago.

Net interest margin for the second quarter of the fiscal stood at 4.45 per cent from 4.5 per cent a year ago.

The bank’s other income increased by 26.5 per cent on an annual basis to ₹1,812.59 crore in the quarter under review.

Provisions jumped up by 27.2 per cent to ₹423.99 crore in the July to September 2021 quarter from ₹333.22 crore in the same period last fiscal.

The bank said it holds Covid-19 provisions of ₹1,279 crore which has not been utilised during the first half of the fiscal year.

Asset quality

As on September 30, 2021, gross non-performing assets stood at 3.19 per cent of gross advances as against 3.56 per cent as on June 30, 2021 and 2.55 per cent as on September 30, 2020. It was lower than ₹703.52 crore in the first quarter of the fiscal.

Net NPA was 1.06 per cent of net advances at the end of the second quarter versus 1.28 per cent at the end of the first quarter and 0.64 per cent as on September 30, 2020.

Jaimin Bhatt, Group President and Group Chief Financial Officer, Kotak Mahindra Bank said that gross slippages amounted to ₹1,293 crore and recoveries and upgrades stood at ₹1,350 crore in the second quarter of the fiscal.

In accordance with the Resolution Framework for Covid-19 related stress of individuals and small businesses, the bank has implemented total restructuring of ₹495 crore (0.21 per cent of advances) as on September 30, 2021.

In addition, in accordance with the Resolution Framework for Covid-19 related stress of MSMEs, the bank has implemented total restructuring of ₹767 crore (0.33 per cent of advances) as at September 30, 2021.

The bank implemented resolution plans in 6,522 accounts with an exposure of ₹226.66 crore under the RBI’s Resolution Framework 1.0. Of this, 27.32 crore slipped into NPA in the first half of the fiscal and the bank wrote-off ₹17.68 crore.

Under Resolution Framework 2.0, the lender has implemented resolution plans in 2,234 accounts with a total exposure of ₹268.63 crore. On account of this, the bank increased provisions by ₹37.73 crore.

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