कोटक महिन्द्रा बैंक

बीएसई: 500247  |  NSE: KOTAKBANK  |  ISIN: INE237A01028  |  Banks - Private Sector

खोजें कोटक महिन्द्रा बैंक कनेक्शन Mar 17
अध्यक्षीय भाषण साल : Mar '18

Dear Friend,

Banks are going through turbulent times. The shod of recent losses incurred by banks looks unreal. This reality looks like it is a culmination of years of kicking the can. Are these heightened provisions £ short-term phenomenon for the next few quarters? It seems so as of now. The silver lining amidst this chaos is the Insolvency and Bankruptcy Code (IBC) which is a game changer. It has changed the game from debtor in possession to creditor in possession in case of defaults. However, in Indian Banking, history repeats itself. How do we prevent this from happening again?

Risk Management

This is the most understated but crucial banking function. Underwriting is key. Errors of ''Commission'' not ''Omission'' destroy banks. Another underestimated risk is operational risk. Gaps in operational risk management were highlighted in the recent Letter of Undertaking (LoU) scandal. We also underestimate the importance of reputational risk management.


This is the heart of the issue.

It includes governance by the state, the regulators, and of course, by the banks. As reflected by events around us, it is naive for policy makers to believe that diversified ownership/state ownership is the way to good governance in banking. Banks deal with other people''s money. The issue is directors and managers with no skin in the game are taking decisions on lending and writing off thousands of crores!

Sound principles of corporate governance and harmonious functioning between government and regulators are the crucial elements for a sound future of banking.


In this era of short termism, bankers are driven by targets, incentives and ESOPs. Trade-off between customer centricity and achieving targets leads to perverse behaviour. The recent case of a leading US bank is an example. Similarly, taking higher risks for short-term boost to profits is a recipe for disaster

As I have mentioned earlier, bankers need three human qualities -Prudence, Simplicity and Humility Conduct is the key to our future.

Letter versus Spirit

The time has come for us to be driven by spirit and not letter When in doubt, let us follow spirit as our driving compass.

The points which I have mentioned above lie at the heart of restoring and sustaining trust in Indian banking.

Report Card

International factors - hardening oil prices and the expected increase in US Fed rates later this year, are putting pressure on our macro economy. India''s current account and fiscal deficit will both face challenges. At the same time, our micro economy is doing better. Over the last four years, we saw a good macro and a tough micro. In 2018, we are likely to see a tough macro and a better micro.

Your bank''s (consolidated) performance for FY 2017-18 reflects that reality. The formalisation of the Indian economy in the financial sector will continue to gain momentum. In this context, our fundamental business model of concentrated India, diversified financial services is likely to deliver positive results for our businesses.

I am happy to share that all our business metrics - loan growth, quality of our loan book and the overall parameters in our core banking business, insurance, wealth management, securities, asset management, and the overall financial services franchise are well positioned.

On 29th March, 2017, while launching 811, we had made a commitment to double our customer base in 18 months, that is, to about 16 million by September 2018. I am happy to share that we are on course to achieve the target. As of 31st March, 2018, we have crossed the 13 million mark (which includes our 811 customers as well).

The Life Insurance business, until last year, was a joint venture between Old Mutual and Kotak Mahindra Bank with the ownership ratio of 26:74, between the two entities.

We bought Old Mutual''s stake in October 2017, and now Kotak Life Insurance is a 100% subsidiary of the Bank. We are happy to report that our Indian Embedded Value number stands at ''5,824 crore and our Value of New Business (VNB) margin is 29% as on 31st March, 2018.

Another important area where we are making an important disclosure is in our Wealth Management business and our Priority Banking business. The relationship value number is in excess of Rs,2,25,000 crore. We believe we are the market leader in this segment, and will continue to strive and strengthen our positioning.

Last but not the least, Kotak Securities commands 8.5% market share in the cash segment and our Group Assets Under Management (AUM) has grown by 29%.

Future Course

Post FY 2016-17, I see three mega trends emerging in the Indian financial services space. The first mega trend is stressed asset woes and capital crunch that will lead to

subdued growth in public sector banks. Over the next five years, private sector banks will increase their industry share from 30% to 50%. The second mega trend is the formalisation of savings, which we are already witnessing.

The third is digital. Digital combined with Aadhaar is a massive game changer. I cannot over emphasise Aadhaar.

India needs to grow at 9% per annum sustainably for the next 20 years to reach China''s current per capita income. To achieve this, the wheels of finance must move seamlessly and speedily. We at Kotak are committed to be an integral part of India''s mission.

We see an opportunity for us to sustainably grow in the financial services space at over 2X India''s nominal GDP growth.

We are committed to customer interests, high quality governance, risk management and conduct as the bedrock of this aspiration.

With warm regards,

Mumbai 1st June, 2018

स्रोत: रेलीगरे टेचनोवा

न्यूज़ फ़्लैश

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अभी देखें

मार्केट काउंटडाउन




(August 06, 2018)

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