India's fourth largest private lender Kotak Mahindra Bank (KMB) is open to every type of inorganic growth opportunity, provided it makes valuation, strategic and management bandwidth sense, MD & CEO Ashok Vaswani told NDTV Profit in an interaction.
With the bank's capital adequacy ratio at 22.4%, the lender has enough firepower to acquire new assets, Vaswani says.
His comments come amid reports of the bank assessing buying out Deutsche Bank India's retail business.
Vaswani further clarified that the bank did not pursue acquiring IDBI Bank because the valuations sought by the government was higher, which was reflected in the fact that government received bids which were lower than reserve price set for IDBI Bank.
Kotak's management bandwidth, too, would have stretched if the lender opted to buyout IDBI Bank.
Expected Credit Loss Model
KMB management says the impact of implementing the final expected credit loss model (ECL) guidelines will be less than 2% of bank's net worth. The Reserve Bank of India (RBI) last month released much anticipated final ECL guidelines, which are expected to hit the capital base of lenders, especially the ones with higher share of unsecured loans on their books.
ECL model is implemented by global lenders and it is positive for Indian banks to implement the same provisioning model, Vaswani said.
West Asia Conflict
Vaswani said the ongoing West Asia crisis will have some impact on various supply chains and presently the situation is very fluid on ground. The bank is assessing with its clients on the second and third order impact of the conflict on their business and monitoring customer behaviour closely.
Under normal circumstances, the bank gives a guidance of growing it's loan book by 1.5-2 times of nominal GDP growth but the onset of conflict has clouded the visibility on business growth, the CEO said.
At 4.67%, the bank's net interest margin (NIM) is on a higher level than it's peers and as margins are a function of deposit pricing, the lender may see some gradual decrease in NIM in FY27, Vaswani said.
KMB's net profit was up 13% YoY to ₹4,027 crore in Q4FY26, largely aided by stable core income growth and lower provisions.
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