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Kotak Mahindra Bank Q4 Review - Discussion Shifts Away From Loan Growth To Deposit Accretion: Yes Securities

Kotak Mahindra Bank Q4 Review - Discussion Shifts Away From Loan Growth To Deposit Accretion: Yes Securities

<div class="paragraphs"><p>Signage for Kotak Mahindra Bank Ltd. is displayed outside a branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
Signage for Kotak Mahindra Bank Ltd. is displayed outside a branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

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Yes Securities Report

There are some factors supporting net interest margin including the fact that Kotak Mahindra Bank Ltd. will rachet up savings account growth.

Additionally, unsecured retail is a small proportion of overall loan book and its share should rise. Also, the fixed rate loan book is a relatively small part of overall loan book.

At the same time, despite a loan growth of 21% YoY, capital adequacy has inched up on YoY basis.

The bank sees this as an opportunity to enhance market share, while adhering to risk-adjusted pricing. Management stated that there could be a contraction of 10-15 basis points in net interest margin, presumably from the elevated quarterly level of 4.78%.

Management also stated that 4.78% is an 'exceptional' margin and a margin of 4.3- 4.6% would be regarded as healthy for a bank growing at the pace of Kotak Mahindra Bank.

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Yes Securities Kotak Mahindra Bank Q4FY22.pdf

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