MOSL: KOTAK MAHINDRA BANK (Buy)-Steady quarter-loan growth gaining momentum
​Kotak Mahindra Bank: Steady quarter; loan growth gaining momentum
(KMB IN, Mkt Cap USD28.5b, CMP INR1010, TP INR1179, 17% Upside, Buy)
- Standalone results: PAT grew 22% YoY to INR9.94b (3% miss). Operating profit increased 20% YoY, led by healthy NII growth (+16% YoY, even as NIM shrunk 17bp QoQ to 4.33%), steady fee income growth (+29% YoY) and controlled operating expenses. Asset quality remains healthy, with the GNPL ratio declining by 11bp QoQ to 2.47% and the coverage ratio by 260bp QoQ to 49.7%. The bank received RBI inspection report and no divergence was reported as of March 2017.
- Loan growth gained momentum, coming in at 21% YoY (+7% QoQ), led by strong traction in CV, small business and personal banking segments. Deposit growth stood at 17% YoY/1% QoQ.
- Other highlights: a) CASA growth remained strong at 44% YoY (62% YoY growth in SA deposits). CASA ratio thus increased 390bp QoQ to 47.8%. b) SMA2 advances declined to 16bp of loans v/s 21bp in 1QFY18, while OSRL declined to INR650m (4bp of loans).
- Other businesses: a) Profitability in the securities business improved to INR1.18b, up 23% YoY, while Kotak Life Insurance also reported strong earnings growth. b) K-Sec market share stood at 1.9% (stable QoQ). c) Asset management business average AUM increased 9% QoQ (+57% YoY), led by strong inflows in equity AUM (+102% YoY).
Kotak Mahindra Bank is principally engaged in commercial banking activities. Co.'s services are provided through branch banking, telephone banking, internet banking, mobile banking, direct pay services, payment gateway for online shopping, a global debit card, a prepaid spending card and facility to transfer of funds to all Visa debit and credit cards in India. As of Mar 31 2007, Co.'s total assets and deposits was IRs286,308,094,000 and IRs96,609,722,000 respectively. In additions, Co. had 105 branches and 135 ATMs in 69 locations throughout India.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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