Kotak Mahindra Bank - Slippages, Credit Cost Elevated; Structurally Ready For Growth: ICICI Securities
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ICICI Securities Report
Kotak Mahindra Bank Ltd.’s Q4 FY21 earnings disconcerted on two counts:
Higher provisioning at more than 200 basis points (versus 120 basis points in nine-months FY21) and slippages at 4% in H2 FY21 (2.5% for FY21), quite uncharacteristic of the bank. However, on a positive note, gross non-performing assets settled near Q3 FY21 proforma levels, restructuring was a mere 0.2%, and special mention account-II pool negligible at 5 basis points.
On guided lines, loan growth sustained 4.5% quarter-on-quarter momentum, yet lags its private sector peers with mere 2% year-on-year growth, due to cautious stance on unsecured lending and pricing focus in corporate banking.
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