Kotak Mahindra Bank
JP Morgan upgrades Kotak Mahindra Bank to overweight
JP Morgan has upgraded private sector lender Kotak Mahindra Bank from neutral to overweight, media reports said.
The target price has been raised to Rs 2070 per share, marking a 34 percent increase from the last close, reported Money Control.
JP Morgan stated that the impact after RBI action on F25/26 growth should be minimal. In Q4, the bank demonstrated strong core operating metrics, with headline profit adjusted for one-offs surpassing JPMe by 8 percent. Core PPOP growth stood at +% 12y/y, accompanied by significant fee growth, the news portal reported.
In its latest financial result, the bank’s PAT for FY24 increased to Rs. 13,782 crore from Rs. 10,939 crore in FY23, up 26% YoY.
PAT for Q4FY24 stood at Rs. 4,133 crore, up 18% YoY from Rs. 3,496 crore in Q4FY23 (up 38% QoQ from ₹ 3,005 crore in Q3FY24).
Net Interest Income (NII) for FY24 increased to ₹ 25,993 crore, from ₹ 21,552 crore in FY23, up 21% YoY and for Q4FY24 increased to Rs. 6,909 crore, from Rs. 6,103 crore in Q4 FY23, up 13% YoY (up 5% QoQ from Rs. 6,554 crore in Q3FY24). Net Interest Margin (NIM) was 5.28% for Q4FY24.
Fees and services for FY24 increased to Rs. 8,464 crore from Rs. 6,790 crore in FY23, up 25% YoY and for Q4FY24 increased to Rs. 2,467 crore from Rs. 1,928 crore in Q4FY23, up 28% YoY (up 15% QoQ from Rs. 2,144 crore in Q3FY24).
Operating costs increased to ₹ 16,679 crore in FY24 (Rs.13,787 crore in FY23).
Technology expenses were 10% of total operating cost in FY24. Operating profit for FY24 increased to Rs. 19,587 crore from Rs. 14,848 crore, up 32% YoY and for Q4FY24 increased to Rs. 5,462 crore from Rs. 4,647 crore in Q4FY23, up 18% YoY (up 20% QoQ from Rs. 4,566 crore in Q3FY24).
Customers as at March 31, 2024 were 5.0 cr (4.1 cr as at March 31, 2023).
RBI's recent move against Kotak Mahindra Bank
The Reserve Bank of India on Wednesday (April 24, 2024) barred private lender Kotak Mahindra Bank from onboarding new customers online and issuing new credit cards with immediate effect.
The Indian central bank said in a press release: "The Reserve Bank of India has today, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, directed Kotak Mahindra Bank Limited (hereinafter referred to as ‘the bank’) to cease and desist, with immediate effect, from (i) onboarding of new customers through its online and mobile banking channels and (ii) issuing fresh credit cards."
"The bank shall, however, continue to provide services to its existing customers, including its credit card customers," RBI said.
About Kotak Mahindra Bank Limited
Established in 1985, Kotak Mahindra Group is one of India's leading financial services conglomerates.
In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group's flagship company, received banking licence from the Reserve Bank of India (RBI), becoming the first non-banking finance company in India to convert into a bank - Kotak Mahindra Bank Limited. The Bank has four Strategic Business Units – Consumer Banking, Corporate Banking, Commercial Banking, and Treasury, which cater to retail and corporate customers across urban and rural India.
As on 31st December 2023, Kotak Mahindra Bank Ltd has a national footprint of 1,869 branches and 3,239 ATMs, and branches in GIFT City and DIFC (Dubai).
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