KOTAKBANK

** Shares of Kotak Mahindra Bank KTKM.NS rise about 2% to 2,104 rupees, their highest in over two months since July 25

** Morgan Stanley says shares are 80% likely to outperform private bank industry .NIFPVTBNK over next 30 days

** Reiterates positive view on KTKM on strong setup and exposure to segments that benefit from macroeconomic recovery such as commercial banking, vehicle finance and unsecured loans

** "After two years of headwinds, the bank is now on the front foot with rising disbursements and stable margins," says Morgan Stanley

** Maintains "overweight" rating at price target of 2,600 rupees, implying a 30% upside

** Target highest among 36 analysts tracking KTKM with an average "buy" rating - data compiled by LSEG

** KTKM up 15.5% YTD, outpacing 9.3% rise in NIFPVTBNK

(Reporting by Bharath Rajeswaran in Bengaluru)

(([email protected]; +91 9769003463;))

Sept 10 (Reuters) -

• JAPAN'S SUMITOMO MITSUI BANKING CORP SELLS 32.2 MILLION SHARES OF KOTAK MAHINDRA BANK VIA BULK DEALS - NSE DATA

• JAPAN'S SUMITOMO MITSUI BANKING CORP SELLS SHARES OF KOTAK MAHINDRA BANK AT 1,940.80 RUPEES EACH - NSE DATA

Further company coverage: KTKM.NS8316.T

(([email protected];))

** Shares of Kotak Mahindra Bank KTKM.NS rise 1.3% to 1,970 rupees

** Stock top gainer in Nifty Bank Index .NSEBANK, which is up 0.2%

** UBS upgrades rating of private lender to "buy" from "neutral", raises PT to 2,450 rupees from 2,300 rupees, implying a 26% upside from last close

** Says strong positioning across multiple sectors, easing margin and credit cost pressures, and superior return metrics are key drivers for the re-rating

** Forecasts a 17% loan compounded annual growth rate over the medium term

** Expects Kotak’s ROA to stay above 2% FY28–29E, aided by lower opex

** KTKM rated "buy" by 35 analysts on average; median target price is 2,345 rupees – data compiled by LSEG

** Stock up 9.8% YTD vs Nifty Bank's 5.8% rise

(Reporting by Rudra Pratap Singh in Bengaluru)

(([email protected]))

MUMBAI, Aug 19 (Reuters) - India's Kotak Mahindra Prime KTKMP.UL has accepted bids worth 5 billion rupees ($57.5 million) for bonds maturing in five years, three bankers said on Tuesday.

It will pay a coupon of 7.25% and had invited commitment bids for the issue earlier in the day, they said.

The company did not respond to a Reuters email seeking comment.

Here is the list of deals reported so far on August 19:

*Size includes base plus greenshoe for some issues

($1 = 86.9940 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Mrigank Dhaniwala)

(([email protected], [email protected]))

MUMBAI, Aug 18 (Reuters) - India's Kotak Mahindra Prime plans to raise 5 billion rupees ($57.2 million) through the sale of bonds maturing in five years, two bankers said on Monday.

It will pay a coupon of 7.25% and has invited commitment bids for the issue on Tuesday, they said.

The company did not respond to a Reuters email seeking comment.

Here is the list of deals reported so far on August 18:

*Size includes base plus greenshoe for some issues

($1 = 87.4037 Indian rupees)

(Reporting by Khushi Malhotra; Editing by Sumana Nandy)

(([email protected]))

Aug 15 (Reuters) - Kotak Mahindra Bank Ltd KTKM.NS:

• ONE YEAR MCLR AT 8.60% WITH EFFECT FROM AUG 16

Further company coverage: KTKM.NS

(([email protected];))

Rewrites, adds analyst comments in paragraphs 6 and 9 and results details in paragraphs 7-8; updates shares

July 28 (Reuters) - Shares of India's Kotak Mahindra Bank KTKM.NS were on track for their worst day in more than a year on Monday, as a quarterly earnings miss sparked concerns of worsening asset quality.

The stock fell 6.4% to 1,988.60 rupees, the lowest since mid-March and was the worst performer on India's benchmark Nifty 50 index .NSEI, which slipped 0.1%.

Kotak was also the top laggard on the bank .NSEBANK and private bank .NIFPVTBNK indexes.

At least eight analysts slashed their price targets on the "buy"-rated stock after the private lender missed quarterly profit estimates on higher provisions for potential bad loans.

Asset quality pain continued for Kotak and stress in the retail commercial vehicles segment is expected to rise further, analysts at Ambit said.

"Considering such volatility, and limited availability of buffer provisions, we expect fiscal 2026 credit costs to remain elevated," they said.

Kotak, like several Indian banks, has been grappling with rising bad loans in the unsecured loan segment. Its gross non-performing assets ratio worsened to 1.48% of total loans at the end of June from 1.39% a year earlier.

Its net interest margin, a key gauge of profitability, dropped to 4.65% from 5.02% a year earlier, reflecting the impact of the Reserve Bank of India's interest rate cuts.

Analysts at Emkay Global expect the margin to contract further in the second quarter, with a gradual recovery expected from the third quarter.

When interest rates are lowered, banks typically pass on the benefits to borrowers early, followed by lower deposit rates, which can temporarily squeeze margins.

Earlier this month, peer Axis Bank also reported disappointing results, which fanned concerns of declining asset quality.

The session's losses have trimmed Kotak's year-to-date gains to 11%, versus a 10% climb in the private banks index.

(Reporting by Kashish Tandon in Bengaluru; Editing by Sumana Nandy and Mrigank Dhaniwala)

(([email protected]; 8800437922;))

MUMBAI, July 26 (Reuters) - Kotak Mahindra Bank KTKM.NS, India's third-largest private lender by market capitalisation, reported a drop in first-quarter profit on Saturday, as it set aside more funds for potential bad loans and saw a contraction in lending margins.

The bank's standalone net profit fell 47.5% to 32.81 billion indian rupees ($379.42 million) for the quarter ended June 30, down from year-earlier 62.5 billion rupees ($722.75 million), which included a 27.3 billion rupee gain on a stake sale of its insurance subsidiary to Zurich Insurance ZURN.S last year.

On average, analysts had expected a profit of 35.82 billion rupees, according to data compiled by LSEG.

The lender's net interest margin, a key gauge of profitability, fell to 4.65%, from 5.02% a year earlier, reflecting the impact of the Reserve Bank of India's recent interest rate cuts.

When rates are lowered, banks typically pass on the benefits to borrowers first and only later reduce deposit rates, which can temporarily squeeze margins.

Meanwhile, Kotak Mahindra Bank's asset quality deteriorated, with the gross non-performing assets ratio at 1.48% at the end of June, versus 1.39% a year earlier.

Indian lenders have kept a tight lid on unsecured lending after grappling with higher bad loans in that segment, a move that has helped support asset quality.

The bank's provisions for bad loans more than doubled year-on-year to 12.08 billion rupees.

Net interest income grew 6% to 72.59 billion rupees in the first quarter.

While credit growth has slowed across the industry, Kotak Mahindra Bank's loan book expanded 13%, driven mainly by a 16% rise in loans to retail consumers.

($1 = 86.4750 Indian rupees)

(Reporting by Ashwin Manikandan; Editing by Sumana Nandy and Jacqueline Wong)

(([email protected];))

MUMBAI, June 30 (Reuters) - India's Kotak Mahindra Investments accepted bids worth 5.5 billion rupees ($64.12 million) for bonds maturing in two years and 19 days, and 3 years, 1 month and 10 days, three bankers said on Monday.

It will pay a coupon of 7.2941% for the 2027 bond and 7.3286% for the 2028 bond, and had invited bids from bankers and investors earlier in the day, they said.

Kotak Mahindra Investments did not respond to a Reuters' request for comment.

Here is the list of deals reported so far on June 30:

*Size includes base plus greenshoe for some issues

($1 = 85.7700 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Eileen Soreng)

(([email protected]; [email protected]))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, May 22 (Reuters Breakingviews) - Sunil Mehta attempted to draw a line under accounting woes at IndusInd INBK.NS on Wednesday when he presented a full-year update for the bank, which remains without a CEO. The $7 billion Indian lender, the non-executive chairman said, was starting the new financial year with a "clean slate". Some of the details he revealed do not inspire confidence, however.

IndusInd's reversal of interest income on some inappropriately classified microloans dragged it to a net loss of 23.3 billion rupees ($272 million) in the three months to end March, its largest quarterly loss. That coupled with lapses in derivatives accounting reduced its full-year earnings by two-thirds.

This accounts for the full extent of the financial hit from the twin lapses, Mehta said. On the derivatives issue, he also presented some positive findings: the bank has received reports from unnamed external firms that determined the impact was the same as the bank's initial assessment.

If Mehta's overall confidence is not misplaced, the private sector bank is undervalued. IndusInd's crushed shares trade below their one-year forward book value; larger rival Axis Bank AXBK.NS commands a multiple nearly twice its net worth. ICICI ICBK.NS and Kotak Mahindra KTKM.NS enjoy more than three times.

Yet the board suspects employees of fraud, is still working with external advisors to identify the root causes, and IndusInd pointed to the likelihood of future legal action from regulators and investigative agencies. That suggests the fourth quarter may not mark the end of the problems.

Mehta is a grandee of Indian banking, and he oversaw the turnaround of Yes Bank YESB.NS before Japan's Sumitomo Mitsui Banking Corporation agreed to pick up a 20% stake in it this month. Yet the exit of IndusInd's CEO and his deputy has unnerved investors: the shares traded flat on Thursday, underscoring deep scepticism.

Banking analysts were scathing in their assessments too. HDFC Securities said its own channel checks concluded "structurally poor regulatory compliance" and "aggressive booking of fees across multiple businesses, which could come under deeper regulatory scrutiny".

Overall, the current picture keeps alive the possibility the central bank may appoint a state banker to the top role, a level of intervention the monetary authority's new governor Sanjay Malhotra has so far resisted. IndusInd will need to deliver strong results consistently before it wins back the benefit of the doubt.

Follow @ShritamaBose on X

CONTEXT NEWS

IndusInd Bank on May 21 reported a net loss of 23.3 billion rupees ($272 million) for the three months to March on account of interest reversals arising from incorrect classification of some microfinance loans.

A cumulative 1.73 billion rupees was incorrectly recorded as fee income in the nine months to the end of December, and reversed during the quarter ended March 2025, the bank said.

IndusInd's board suspects the occurrence of fraud and the involvement of certain employees that have a significant role in the accounting and financial reporting of the bank.

Sunil Mehta, non-executive chair of IndusInd, said the board is determined to address all identified issues so that they are appropriately resolved.

(Editing by Una Galani; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

** Shares of Kotak Mahindra Bank KTKM.NS down 3.3% so far this week, on track to log their biggest weekly drop since January 10, if losses hold

** Stock dropped 4.6% on May 5 after co reported a larger-than-expected dip in quarterly profit due to higher provisions for potential bad loans

** Analysts said co's results suggest that credit costs are likely to remain elevated over next two quarters

** Stock rated "buy" on avg, median PT at 2,325 rupees - data compiled by LSEG

** In the week ended January 10, KTKM lost 4.5% after Milind Nagnur resigned as COO and CTO

** KTKM is currently trading 0.5% lower

** Stock has gained ~18% so far this year, while Nifty bank index .NSEBANK up ~5% in the period

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

** Shares of Kotak Mahindra Bank KTKM.NS down 5.2% to 2,070.6 rupees; on track for worst day in more than a year

** Stock biggest drag on Nifty Bank index .NSEBANK, Nifty private bank index .NIFPVTBNK, down 0.41% and 0.94%, respectively

** Lender reports larger-than-expected drop in Q4 profit on higher provisions for potential bad loans

** Analysts at Macquarie say KTKM's commentary suggests credit costs to remain elevated over next two quarters

** Investec analysts say co's loan growth is softer than their estimates; BofA says softer loan growth a 'key disappointment' in results

** Stock rated "buy" on avg, median PT at 2,255.5 rupees - data compiled by LSEG

** KTKM up ~22% YTD, while .NSEBANK, .NIFPVTBNK up 8% and ~11%

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

Updates

** Shares of Kotak Mahindra Bank Ltd KTKM.NS jump 4.5% to 2,173 rupees, their highest since late October 2021

** Co named Bhavnish Lathia as new Chief Technology Officer, about two months after previous tech chief Milind Nagnur stepped down

** RBI had flagged gaps in KTKM's IT infrastructure during Nagnur's tenure, barred bank from adding clients via online and mobile banking channels, and issuing credit cards

** Private sector bank top gainer on blue-chip Nifty 50 index .NSEI set for its second-best day this year, if gains hold

** KTKM up for a third consecutive session, rising 6% in this period

** About 433,000 shares traded over three block deals at a 1%-4% premium to last close - National Stock Exchange data

** Analysts tracking KTKM rate it "Buy" on avg, same as most other stocks on 12-member Nifty Bank .NSEBANK index - LSEG data

** Stock up ~22% this year, second only to Bajaj Finance BJFN.NS on Nifty 50 index

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

** Shares of private lender Kotak Mahindra Bank KTKM.NS rise 2.5% to 1,984 rupees

** Stock second-biggest gainer on the Nifty Bank index .NSEBANK, which is up 0.5%

** Nearly 650,000 shares change hands in multiple block deals - LSEG data

** Block deals in price range of 1,941.60-1,995.30 rupees per share, compared to last close price of 1,935.20 rupees

** Stock is up 11% so far in 2025 vs a 5.5% drop in the bank index

(Reporitng by Nishit Navin)

(([email protected];))

Feb 20 (Reuters) - Kotak Mahindra Bank Ltd KTKM.NS:

• KOTAK MAHINDRA BANK - NAMES VYOMESH KAPASI AS NEW HEAD OF PRODUCTS - CONSUMER BANK AT CO

• KOTAK MAHINDRA BANK - NAMES SHAHRUKH TODIWALA AS NEW MD & CEO OF KOTAK MAHINDRA PRIME

Source text: [ID:]

Further company coverage: KTKM.NS

(([email protected];;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Feb 19 (Reuters Breakingviews) - India’s dealmakers are celebrating their arrival on the global map. Last year, Kotak Mahindra Bank KTKM.NS not only topped LSEG's league table for initial public offerings in Asia by volume, edging out CITIC 0267.HK and JPMorgan JPM.N, but it also broke into the ranks of the top 10 underwriters of common stock deals globally by proceeds. Both are firsts for an Indian investment bank. But the strong showing by the $45 billion firm and its compatriots may prove hard to sustain.

A record $71 billion in equity fundraising powered the South Asian country's climb past China and Hong Kong to the spot of the world’s second-largest destination for share placements behind the U.S. last year, per Dealogic data. New-economy companies including Swiggy SWIG.NS and Ola Electric Mobility OLAE.NS going public were a lynchpin for strong fees. Meanwhile, punchy valuations prompted global businesses like Whirlpool WHR.N to cash out stakes in their local units and Hyundai Motor 005380.KS to take its Indian business public.

It spelt a bonanza for banks like Kotak and ICICI Bank ICBK.NS, both of which trade at 3 times forward book value, the top of their peer group. Their rise up the league tables buys them credibility beyond those rich valuations.

The mood is upbeat. At a Mumbai conference of investment banks in January, a singer belted out chest-thumping patriotic numbers in the presence of Madhabi Puri Buch, chief of Securities and Exchange Board of India, the capital markets regulator. Sundararaman Ramamurthy, the CEO of BSE BSEL.NS, one of the country’s two main stock exchanges, described the IPO boom as a moment of India’s “re-emergence” on the world stage.

The pipeline remains strong. Kotak has won a mandate, alongside Morgan Stanley MS.N, for what could be India's largest ever IPO, an up to $4.6 billion listing of Reliance Industries' RELI.NS telecommunications business, IFR reported in January, citing unnamed people. HDFC Bank’s HDBK.NS shadow lending unit has filed for a $1.44 billion float. Businesses ranging from the local unit of South Korean consumer appliances giant LG Electronics 066570.KS to Tiger Global-backed stockbroker Groww are preparing for billion-dollar listings too, per IFR. Kotak expects primary fundraising in India to rise 59% from last year’s level to $35 billion in 2025.

But the broader environment is less cheery. Foreign portfolio investors are dumping Indian shares and companies are reporting dismal earnings, pulling indexes off last year’s dizzying highs. The outlook for GDP growth is sombre. Beijing's push for higher-valued startups could rejuvenate dealmaking in China this year, and Hong Kong listings are rebounding from a 20-year low. The two centres notched up a total $132 billion in equity transactions in 2023 before markets slumped.

Kotak and its peers may find their dealmaking crown was easier to earn than to hold.

Follow @ShritamaBose on X

CONTEXT NEWS

Kotak Mahindra Bank was the 10th largest bookrunner globally for common stock deals by proceeds in 2024, with a 1.5% share of the market, according to LSEG data. It also topped the league table for Asian initial public offerings, including Chinese A-shares, facilitating listings that raised $2 billion during the year.

(Editing by Antony Currie and Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/
[email protected]))

Feb 12 (Reuters) - Kotak Mahindra Bank Ltd KTKM.NS:

• WILL CONTINUE TO WORK CLOSELY WITH RBI TO SHORTLY RESUME DIGITAL ONBOARDING OF NEW CUSTOMERS, ISSUING FRESH CREDIT CARDS

Source text: [ID:]

Further company coverage: KTKM.NS

(([email protected];))

By Rajendra Jadhav

MUMBAI, Feb 11 (Reuters) - Gold leasing rates in India have doubled within a month to a record high, following the overseas market, where rates jumped due to a supply crunch as global banks divert the precious metal to the United States, industry officials told Reuters.

Higher leasing rates are driving up jewellery production costs in the world's second-largest gold consumer and could squeeze margins of jewellers such as Titan TITN.NS, Kalyan Jewellers KALN.NS, and Tribhovandas Bhimji Zaveri TBZL.NS.

Gold leasing rates, which traditionally hover around 1.5% to 3%, have more than doubled in a month and could rise further, Shekhar Bhandari, president and business head of Kotak Mahindra Bank KTKM.NS told Reuters.

"Given the geopolitical uncertainty, trade war, and benefit arising out of higher futures prices on CME as compared to spot, it seems leasing rates will remain elevated for the next few months," he said.

Global bullion banks are flying gold into the United States from London, Switzerland, and Asian hubs such as Dubai and Hong Kong to capitalise on the unusually high premium of U.S. gold futures GCcv1 over spot prices XAU=, Reuters has reported.

The rush to move gold to the United States has lifted gold leasing rates in London, the world's key over-the-counter (OTC) market.

Banks in import-dependent India borrow gold from overseas banks and lend to jewellers. Rising borrowing costs have proportionally increased leasing rates in India, Bhandari said.

"Jewellers were caught off-guard by the leasing rate shooting up to a record high," said Amit Modak, chief executive of PN Gadgil and Sons, a jeweller based in the western city of Pune. "Now they're clueless about how to handle it."

Bullion-supplying banks were not bringing gold into India in recent weeks since the market is in discount, while deliveries on COMEX fetch premium, a Mumbai-based dealer with a bullion importing bank said.

The premium on COMEX futures over spot prices widened again to about $28 per ounce on Monday, compared with discounts as high as $24 in India.

Vaults in key Indian cities storing gold imported by bullion banks are nearly empty, as banks have moved gold to the United States and are not interested in bringing it to India given the discounts, said another Mumbai-based dealer with a bank.

"Indian discounts could have risen above $100 due to negligible demand. But a supply crunch is keeping them from sky-rocketing," he said.

(Reporting by Rajendra Jadhav; Additional reporting by Siddhi Nayak; Editing by Clarence Fernandez)

(([email protected]; Reuters Messaging: x.com/Rajendra1857))

By Shubham Batra and Dharamraj Dhutia

MUMBAI, Feb 10 (Reuters) - India's benchmark 10-year government bond remains the top choice after last week's rate cut amid hopes of further central bank bond buys, although shorter-duration debt is expected to become more attractive next quarter, an executive at Kotak Mahindra Asset Management said on Monday.

With the Reserve Bank of India (RBI) expected to provide liquidity through more open market operations (OMO) and/or foreign exchange (FX) swaps, the 10-year is likely to trade in the 6.55%-6.75% band until March, Deepak Agrawal, chief investment officer - fixed income, told Reuters Trading India.

The fund house manages 1.68 trillion rupees ($19.19 billion) of debt assets.

"Since RBI is doing OMOs, we currently prefer 10-year security, with incremental OMOs expected. Post further rate cuts and liquidity in the system, we would prefer shorter-end of the curve (like) 5-year."

Agrawal expects the bond yield curve to steepen and sees the shorter-end falling by about 20-25 basis points (bps) in the April-June quarter.

The RBI has already poured over 1.50 trillion rupees into the banking system over the last month through open market purchases of bonds, a 56-day repo, FX swaps, and by buying bonds in the secondary market.

It will purchase 200 billion rupees of bonds each this week and the next.

Agrawal expects the RBI to infuse another 750 billion-1 trillion rupees of durable liquidity after it completes its third OMO auction next week and before the end of this financial year that ends in March.

"We continue to expect further liquidity injection either through OMOs or one more FX swap."

He sees the RBI delivering another 25-bp rate cut by June but said a 50-bp reduction is on the cards if GDP growth continues to lag.

In the corporate bond space, Agrawal finds the two- to five-year part of the curve attractive, amid bets of more rate cuts and liquidity infusion, with these bonds also providing a decent carry trade opportunity.

($1 = 87.5670 Indian rupees)

(Reporting by Shubham Batra in New Delhi and Dharamraj Dhutia in Mumbai; Editing by Sonia Cheema)

(([email protected];))

** Shares of Kotak Mahindra Bank KTKM.NS rise nearly 8% for the week, on course for best weekly gain since Sept. 17, 2021

** The Mumbai-based private lender had posted a 10% rise in Q3 profit as it boosted lending

** Strong quarter owing to beat on credit growth, NIM, opex and asset quality, said analysts at Prabhudas Lilladher Capital

** Raising FY26/27 core PAT estimate by 1.6%/3.8% due to better loan growth/opex - Prabhudas Lilladher

** 38 analysts covering KTKM on avg have a "buy" rating, same as rivals Axis Bank AXBK.NS and HDFC Bank HDBK.NS- LSEG data

** KTKM had slipped ~4% in Q3, while AXBK shed ~14%; HDBK gained 2.4% in Q3

(Reporting by Ashna Teresa Britto in Bengaluru)

(([email protected] ; ( +91 8078332441))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Jan 23 (Reuters Breakingviews) - A small-loan crisis is creeping up on India’s banks. Bad debt inched up at the $146 billion HDFC Bank HDBK.NS and other private lenders in the three months to the end of December, and the central bank recently warned of a deep rot in small loans. The $2 trillion banking system is better prepared for an asset quality crisis than a decade ago, but a stalling economy could batter its defences.

HDFC’s gross bad loan ratio rose six basis points from the end of September to 1.42%. Axis Bank AXBK.NS doubled its provisions and contingencies from the same three-month period in the previous year to account for defaults on unsecured personal loans, and Kotak Mahindra Bank KTKM.NS raised them by 37%.

India’s banks learnt some lessons from the last blowup in 2015-16, when a string of chunky project loans left their balance sheets bleeding. At 16.7%, their capital as a share of risk weighted assets is nearly four percentage points higher than in 2014. The share of the top 100 borrowers in outstanding loans is down to 15% from 18%. Bad loans are at a 12-year low of 2.6%. And the Reserve Bank of India mandates Indian lenders hold a 2.5% buffer above the 9% minimum capital requirement under Basel III norms. It tightened the screws on unsecured loans in November 2023 to curb excessive risk-taking.

Macroeconomic disruption could mess with that. An RBI stress test revealed that in an extreme scenario where GDP growth slows to around 3% and inflation rises to 7.8%, four banks may breach the minimum capital requirement of 9%.

Mid-sized private banks are prone to that risk. In 2020, Yes Bank’s YESB.NS rivals rescued it from near-failure with cash infusions and months later, Singapore's DBS DBSM.SI acquired another capital-starved lender based in southern India. That’s making markets jittery about private lenders like RBL RATB.NS and IndusInd Bank INBK.NS which specialise in microloans of under $500, the segment where the stress is deepest. The finance chief of IndusInd, which reported surging provisions and a profit drop in the September quarter, resigned on Friday.

So far the risk is limited to only a slice of loans -- unsecured loans account for a quarter of total bank credit. To contain it, banks are easing off on new lending. That in turn could slow GDP growth further. It’s a feedback loop India can ill afford.

Follow @ShritamaBose on X

CONTEXT NEWS

HDFC Bank on Jan. 22 reported consolidated net profit of $2.04 billion for the three months to Dec. 31, 2% higher than in the same period a year earlier. The bank’s gross non-performing asset ratio rose six basis points from the end of September to 1.42%.

IndusInd Bank on Jan. 18 said Chief Financial Officer Gobind Jain resigned from the position on the previous day to pursue other professional opportunities.

(Editing by Antony Currie and Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/
[email protected]))

Updates for markets open

Jan 20 (Reuters) - Indian shares opened higher on Monday as Kotak Mahindra Bank's results boosted private banks and Wipro's better-than-expected quarterly profit helped lift IT stocks.

The Nifty 50 .NSEI rose 0.38% to 23,290.4 points as of 9:16 a.m. IST, while the BSE Sensex .BSESN added 0.47% to 76,978.53.

The broader, more domestically focussed smallcaps .NIFSMCP100 and midcaps .NIFMDCP100 rose 0.3% and 0.6%, respectively.

All the 13 major sectors advanced at the open. The private bank index .NIFPVTBNK rose 1.1%, while IT stocks .NIFTYIT rose 0.5%.

Kotak Mahindra Bank KTKM.NS jumped 7.5% after reporting a 10% rise in quarterly profit, helped by higher lending income.

Wipro WIPR.NS surged 7% after beating third-quarter estimates for revenue and profit.

Kotak and Wipro were the top gainers on Nifty 50.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Savio D'Souza)

(([email protected]; +91 9769003463;))

MUMBAI, Jan 18 (Reuters) - India's Kotak Mahindra Bank KTKM.NS on Saturday reported a 10% rise in quarterly profit as it boosted lending, although provisions for potential bad loans surged.

The Mumbai-based private lender's standalone net profit - which excludes earnings from its subsidiaries - rose to 33.05 billion rupees ($382 million) in the three months to end-December, in line with an LSEG consensus estimate.

Its net interest income, the difference between what a bank earns on loans and pays out on deposits, rose 10% to 71.96 billion rupees.

The net interest margin shrank to 4.93% from 5.22% a year earlier, but was slightly higher than the 4.91% reported in the previous quarter.

Kotak's loans rose 16% in value terms in the December quarter, while deposits were up 15%.

The loan growth comes despite restrictions placed on Kotak since April 2024 by the central bank, which prevent it from taking on new digital clients and issuing credit cards. The penalty was imposed for gaps in its IT infrastructure.

But Kotak's provisions and contingencies, or funds set aside for potential bad loans, jumped 37% to 7.94 billion rupees.

Gross non-performing assets ratio, a key gauge of asset quality, worsened slightly to 1.50% at the end of December from 1.49% at the end of September.

Most Indian banks saw asset quality worsen during the April-October period last year, with bad loans rising primarily in the microfinance and unsecured segments.

Earlier this week, private lender Axis Bank missed quarterly profit estimates on slower loan growth and higher bad loan provisions.

($1 = 86.5710 Indian rupees)

(Reporting by Siddhi Nayak; Editing by Edwina Gibbs)

(([email protected]; +91 22 6921 7848; X: https://twitter.com/siddhiVnayak))

Adds analysts' comments in paragraphs 9, 11 and 12

By Ashna Teresa Britto and Siddhi Nayak

Jan 17 (Reuters) - Shares of Axis Bank AXBK.NS fell to a 14-month low on Friday, a day after the lender missed profit estimates on slower loan growth, higher bad loan provisions, and forecast that retail asset quality would take a few more quarters to normalise.

Axis Bank was the first major Indian bank to report its results in an industry grappling with rising bad loans, particularly in sectors such as microfinance and the unsecured portfolio. This has led lenders to allocate more funds for potential losses.

The 5.4% drop in Axis Bank's shares placed them at the bottom of the blue-chip Nifty 50 .NSEI on Friday, and dragged the Nifty Bank index .NSEBANK lower by 1.3%.
The bank "calibrated" loan growth due to the stress in certain segments, Executive Director Subrat Mohanty said on Thursday, while finance chief Puneet Sharma noted that most provisions, which more than doubled in the third quarter, stemmed from slippages in the unsecured retail portfolio.

Axis Bank's third-quarter profit missed analysts' expectations due to rising credit costs and slowing loan growth.

Loans grew 9% year-on-year, slower than the 11% increase in the previous quarter.

The bank's asset quality deteriorated, with slippages - loans classified as bad for the first time - rising.

Normalisation of retail asset quality is underway and will take a few quarters to stabilise, CEO Amitabh Chaudhry said.
Analysts at Goldman Sachs said the bank's asset quality cycle is yet to peak, which could lead to higher slippages.

Following the results, at least 16 analysts covering Axis Bank's stock lowered their price targets, according to data compiled by LSEG.
Axis Bank will need slippages to peak and growth to accelerate in order to bridge valuation gap with larger private peers, JPMorgan said in a note.

"Microfinance and unsecured retail slippages will be higher for other banks, too, in the fiscal third quarter," said Anand Dama, head BFSI at Emkay Global Financial Services.

($1 = 86.5850 Indian rupees)

(Reporting by Ashna Teresa Britto and Chris Thomas in Bengaluru, Siddhi Nayak in Mumbai; Editing by Sherry Jacob-Phillips)

(([email protected];))

Jan 13 (Reuters) - Kotak Mahindra Bank Ltd KTKM.NS:

• JSW MG MOTOR INDIA PARTNERS WITH KOTAK MAHINDRA PRIME FOR EV FINANCING - STATEMENT

Source text: [ID:]

Further company coverage: KTKM.NS

(([email protected];))

Jan 8 (Reuters) - Kotak Mahindra Bank Ltd KTKM.NS:

• TO CONSIDER A PROPOSAL FOR RAISING FUNDS

• TO CONSIDER ISSUANCE OF NON-CONVERTIBLE DEBENTURES

Source text: ID:nBSE2xsBNW

Further company coverage: KTKM.NS

(([email protected];;))

** Indian private lender Kotak Mahindra Bank KTKM.NS drops 3.1% to 1,782.4 rupees

** Co said late on Friday that Milind Nagnur resigned from his positions as COO and CTO, citing personal reasons

** Analysts at Nomura said Nagnur's exit adds to recent top management churn at co

** Any impact of the recent exit on KTKM's ban resolution timelines or medium-term growth outlook will be key monitorables - Nomura

** The RBI restricted co from adding clients through its online and mobile banking channels, in April

** Keeps "buy" rating, target price of 2,170 rupees

** Stock among top four losers on Nifty 50 index .NSEI, which is down 1.1%

** KTKM lost 6.4% in 2024 vs 9.4% gains in Nifty financial services index .NIFTYFIN

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

Jan 3 (Reuters) - Kotak Mahindra Bank Ltd KTKM.NS:

• KOTAK MAHINDRA BANK LTD - MILIND NAGNUR RESIGNS AS COO AND CTO OF KOTAK MAHINDRA BANK

Source text: ID:nBSE6sy663

Further company coverage: KTKM.NS

(([email protected];))

** Kotak Mahindra Bank KTKM.NS shares up 2% at 1,820 rupees, top gainer in bank index .NSEBANK

** Jefferies upgrades to "buy" from "hold" on attractive valuations; raises PT to 2,120 rupees from 2,080 rupees

** Citi also upgrades to "buy" and raises PT to 2,070 from 1,940 rupees on sustaining loan growth

** Bank of Baroda BOB.NS drops 1.4% as Jefferies cuts rating to "hold" and PT to 270 rupees

** KTKM fell 6.4% in 2024, underperforming larger peers like HDFC Bank HDBK.NS (up 3.7%) and ICICI Bank ICBK.NS (up ~29%) vs 5% gains in bank index

** BOB gained 4.1% last year

(Reporting by Sethuraman NR in Bengaluru)

(([email protected]; (+91 9945291420); Reuters Messaging: [email protected]))