MIRA
INFORM REPORT
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Report Date : |
08.01.2011 |
IDENTIFICATION DETAILS
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Name : |
KOTAK MAHINDRA BANK LIMITED |
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Formerly Known As : |
KOTAK MAHINDRA FINANCE LIMITED (KMFL) |
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Registered Office : |
36-38 A, Nariman Bhavan,
227, D, Nariman Point, Mumbai – 400 021, |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
22.11.1985 |
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Com. Reg. No.: |
11-038137 |
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CIN No.: [Company
Identification No.] |
L65110MH1985PLC038137
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMK01323A |
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PAN No.: [Permanent
Account No.] |
AAACK4409J |
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Legal Form : |
A public limited liability
bank. The Bank’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Banking
Activities |
RATING & COMMENTS
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MIRA’s Rating : |
Aa (72) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 170000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an
established bank in Private sector. It has been Promoted by well – known
banker Mr. Uday Kotak and well-known industrial house Mahindra and Mahindra (automobile
giant). Available information indicates high financial responsibility of the
Bank. Financial position is very good. Trade relations are fair. Payments are
correct and as per commitments. Subject can be
regarded as a promising business partner for any normal business
dealings. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INFORMATION PARTED BY (GENERAL DETAILS)
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Name : |
Ms. Seema Dixit |
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Designation : |
Accountant |
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Contact No.: |
91-22-66056825 |
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Date : |
07.01.2011 |
LOCATIONS
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Registered Office : |
36-38 A, Nariman
Bhavan, 227, D, Nariman Point, Mumbai – 400 021, |
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Tel. No.: |
91-22-66581100/66056825 |
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Fax No.: |
91-22-22855577/66215757 |
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E-Mail : |
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Website : |
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Location : |
Owned |
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Head Office : |
Vinay Bhavya Complex, 4th Floor, 159 – A, |
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Tel. No.: |
91-22-66426666/ 66426300 |
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Fax No.: |
91-22-26542876/ 2824 |
DIRECTORS
As on 31.03.2010
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Name : |
Dr. Shankar Acharya |
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Designation : |
Chairman |
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Name : |
Mr. Uday Kotak |
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Designation : |
Executive Vice Chairman and Managing Director |
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Name : |
Mr. Sudipto Mundle |
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Designation : |
Director |
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Name : |
Mr. Anand Mahindra |
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Designation : |
Director |
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Name : |
Mr. Cyril Shroff |
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Designation : |
Director |
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Name : |
Mr. Deepak Gupta |
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Designation : |
Executive Director |
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Name : |
Mr. Shivaji Dam |
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Designation : |
Director |
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Name : |
Mr. C. Jayaram |
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Designation : |
Executive Director |
KEY EXECUTIVES
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Name : |
Ms. Bina Chandarana |
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Designation : |
Company Secretary |
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Name : |
Mr. Jaimin Bhatt |
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Designation : |
Group Chief Financial Officer |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.09.2010
|
Category of Shareholder |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding
of Promoter and Promoter Group |
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308,896,208 |
42.12 |
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26,897,060 |
3.67 |
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335,793,268 |
45.79 |
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Total
shareholding of Promoter and Promoter Group (A) |
335,793,268 |
45.79 |
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(B) Public
Shareholding |
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25,143,666 |
3.43 |
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20,534,647 |
2.80 |
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183,555,343 |
25.03 |
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229,233,656 |
31.26 |
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28,870,281 |
3.94 |
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37,722,399 |
5.14 |
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57,930,004 |
7.90 |
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43,838,834 |
5.98 |
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4,476,567 |
0.61 |
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4,358,680 |
0.59 |
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76,124 |
0.01 |
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104,707 |
0.01 |
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1,250,804 |
0.17 |
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771,952 |
0.11 |
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32,800,000 |
4.47 |
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168,361,518 |
22.96 |
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Total Public shareholding
(B) |
397,595,174 |
54.21 |
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Total (A)+(B) |
733,388,442 |
100.00 |
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(C) Shares held
by Custodians and against which Depository Receipts have been issued |
18,262 |
- |
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Total
(A)+(B)+(C) |
733,406,704 |
- |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 millionBUSINESS DETAILS
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Line of Business : |
Banking
Activities |
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Terms : |
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Selling : |
L/C, Cash, Credit |
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Purchasing : |
L/C, Cash, Credit |
GENERAL INFORMATION
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Customers : |
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No. of Employees : |
Above 20000
(approximately) |
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Bankers : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
S.R. Batliboi and Company Chartered Accountants |
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Address : |
Mumbai |
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Subsidiaries : |
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Associates : |
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CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
400000000 |
Equity Shares |
Rs.10/- each |
Rs.4000.000 millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
348141477 |
Equity Shares |
Rs.10/- each |
Rs.3481.415
millions |
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(Of the above 18,49,85,250 Equity shares have been issued as bonus
shares by capitalisation of Reserves)
As on 21.07.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
400000000 |
Equity Shares |
Rs.10/- each |
Rs.4000.000 millions |
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Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
367306726 |
Equity Shares |
Rs.10/- each |
Rs.3673.067
millions |
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FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
|
Capital and Liabilities |
|
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Capital |
|
3481.415 |
3456.689 |
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Reserves and Surplus |
|
41369.735 |
34679.490 |
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Employees' Stock Options (Grants) Outstanding |
|
548.017 |
919.086 |
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Deposits |
|
238864.671 |
156439.963 |
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Borrowings |
|
61405.132 |
67340.106 |
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Other Liabilities and Provisions |
|
28694.195 |
24283.405 |
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Total |
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374363.165 |
287118.739 |
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Assets |
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Cash and Balances with Reserve Bank of |
|
20856.726 |
9953.533 |
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Balances with Banks and Money at Call and Short Notice |
|
2145.915 |
1453.164 |
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Investments |
|
125126.625 |
91101.805 |
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Advances |
|
207750.541 |
166253.371 |
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Fixed Assets |
|
4276.492 |
2133.560 |
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Other Assets |
|
14206.866 |
16223.306 |
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Total |
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374363.165 |
287118.739 |
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Contingent Liabilities |
|
369660.202 |
579542.087 |
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Bills for Collection |
|
6493.241 |
3175.756 |
PROFIT & LOSS
ACCOUNT
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|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
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I. Income |
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Interest earned |
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32556.249 |
30651.440 |
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Other Income |
|
6282.400 |
2736.301 |
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Total |
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38838.649 |
33387.741 |
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II. Expenditure |
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Interest expended |
|
13974.755 |
15465.975 |
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Operating expenses |
|
11893.934 |
11964.229 |
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Provisions and
Contingencies |
|
7358.903 |
3196.565 |
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Total |
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33227.592 |
30626.769 |
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III. Profit |
|
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Net Profit for the year |
|
5611.057 |
2760.972 |
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Add: Surplus brought forward from previous year |
|
6489.435 |
5281.691 |
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Total |
|
12100.492 |
8042.663 |
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IV. Appropriations |
|
|
|
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Transfer to Statutory Reserve |
|
1402.800 |
690.300 |
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Transfer to Capital Reserve |
|
69.600 |
29.700 |
|
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Transfer to General Reserve |
|
280.600 |
138.050 |
|
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Transfer to Investment Reserve Account |
|
11.900 |
417.014 |
|
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Transfer to
Special Reserve u/s 36(1)(viii) of Income Tax Act,1961 |
|
400.000 |
-- |
|
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Proposed Dividend |
|
296.613 |
259.553 |
|
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Corporate Dividend Tax |
|
(20.074) |
18.611 |
|
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Balance carried over to Balance Sheet |
|
9659.053 |
6489.435 |
|
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Total |
|
12100.492 |
8042.663 |
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|
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V. Earnings Per Share (Face Value of Rs. 10/-) |
|
|
|
|
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Basic |
|
16.18 |
8.00 |
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Diluted |
|
16.00 |
7.99 |
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2010 |
30.09.2010 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Audited / UnAudited |
|
UnAudited |
UnAudited |
|
Interest Earned |
|
9208.030 |
10147.230 |
|
Income On Investments |
|
2254.790 |
2344.760 |
|
Interest On Balances With Rbi Other Inter Bank Funds |
|
12.480 |
36.350 |
|
Interest / Discount On Advances / Bills |
|
6940.250 |
7761.400 |
|
Others |
|
0.510 |
4.720 |
|
Other Income |
|
1370.730 |
1393.270 |
|
Total Income |
|
10578.760 |
11540.490 |
|
Interest Expended |
|
4126.100 |
4708.920 |
|
Operating Expenses |
|
3299.240 |
3564.030 |
|
Total Expenditure |
|
3299.240 |
3564.030 |
|
Operating Profit Before Provisions and Contingencies |
|
3153.420 |
3267.550 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
Provisions and contingencies |
|
560.950 |
455.080 |
|
Profit Before Tax |
|
2592.470 |
2812.470 |
|
Tax |
|
723.440 |
865.430 |
|
Profit After Tax |
|
1869.030 |
1947.040 |
|
+/- Extraordinary Items |
|
0.000 |
0.000 |
|
+/- Prior period items |
|
0.000 |
0.000 |
|
Net Profit |
|
1869.030 |
1947.040 |
LOCAL AGENCY FURTHER INFORMATION
The details of sundry creditors is not available.
HISTORY
Subject formerly knowns as Kotak Mahindra Finance (KMFL) was
originally promoted in 1985 by Uday S Kotak and Sidnery A Pinto along with
Kotak and Company under the name Kotak Capital Management Finance. The
promoters were joined by Harish Mahindra and Anand Mahindra of Mahindra and
Mahindra in 1986 and the company was renamed Kotak Mahindra Finance. Since then
it's been a steady and confident journey to growth and success.
The company has established itself as one of
It also have international partnerships with Goldman Sachs (one of the world's
largest investment banks and brokerage firms), Ford Credit one of the world's
largest dedicated automobile financiers) and Old Mutual (a large insurance,
banking and asset management conglomerate) through joint ventures and
subsidiary companies.
The company came out with a public issue in 1993 at a premium of Rs 140
aggregating to Rs 44.1 millions. This was followed by bonus issue in a ratio of
1:1 in 1995. Further during 2000, the company came out with a rights issue of
91,82,500 equity shares of Rs 10 each at a premium of Rs 90 per share
aggregating to Rs 9182.000 millions. In 2001 the company received the approval
for merger Pannier Trading Company Private (PTCPL) subsequently 17,00,000
shares held by PTCPL in the company were cancelled and in terms of scheme
1,50,00,250 shares were allotted to the holders of shares in the erstwhile
PTCPL. The issued share capital of the company stands increased from Rs 459.1 millions
to Rs 592.1 millions as on March 2001.
The company has got the approval from IRDA to enter the life insurance business
and sell insurance products. For this the company has forged a Rs 1500 millions
joint venture with UK based Old Mutual Plc, a UK based Financial Services
group. Moreover the Board has approved the foray into commercial banking, and
resolved to make an application to the Reserve Bank of
The company has approved the amalgamation of Kotak Mahindra Investments
Limited, a wholly owned subsidiary of the company with Hamko Financial Services
Limited another wholly owned subsidiary of the company.
During the year 2003, in order to carry out the banking business the company
was converted into a banking company in the name of Kotak Mahindra Bank
Limited.
Currently the bank is having 42 full fledged branches at 25 locations, offering
most of the latest technology products like net banking, phone banking, ATM cum
Debit Cards etc. Apart from this the bank is also providing personal loans,
home loans and also commenced corporate banking business. Further the bank as
plan to open 65-70 branches by March 2006 and 90-100 by March 2007.
During the bank launched India Growth Fund, a private equity fund; Easy Mutual
Funds; Kotak Flexi Home Loan and Kotak FD-linked Home loan. Further the bank
has launched Direct Pay bill payment facility on net banking and mobile banking
and alerts facility.
During August 2005 the bank has issued bonus equity shares to its shareholders
in the ratio of 3:2.
CAPITAL
The Bank has a high Capital Adequacy Ratio (‘CAR). The CAR (under Basel
II) as at 31st March 2010 was 18.35% with Tier I being 15.42%. At a
consolidated level the CAR was 19.3% under Basel II.
During the year, the Bank has not issued any Capital under Tier II. As
on 31st March 2010, outstanding Unsecured, Redeemable Non-Convertible,
Subordinated Debt Bonds was Rs.4657.000 millions and outstanding Unsecured,
Non-Convertible, Redeemable Debt Capital Instruments Upper Tier II stood at Rs.
3380.500 millions.
SUB-DIVISION OF
EQUITY SHARES
In order to facilitate more liquidity of the Banks Equity Shares in the
stock markets and to make it affordable for the small investors to invest in
the Equity Shares of the Bank, on the occasion of the 25th year of
the organization, the Board of Directors of the Bank at its meeting held on
11th May 2010, has approved sub-division (stock-split) of each Equity Share
having a face value of Rs.10 into two Equity Shares of face value of Rs. 5
each, subject to the approval of the shareholders at the forthcoming Annual
General Meeting of the Bank and approval of all concerned regulatory/statutory
authority(ies).
OPERATIONS
The advantage of a growing network was clearly visible in the CASA
growth rates, Asset Distribution, Mutual Fund and other equity products and
Insurance penetration. The Bank also saw a robust growth in transaction income
which grew by over 100% compared to last financial year.
The strategy of the Bank of leveraging the Bank branches for
distribution of asset products continued to improve quality of earnings by
reducing acquisition costs and improving credit quality. The results in this
area have been very heartening. The growth was spread across all products
ranging from Home Loans, Personal Loans, Commercial Loans, Credit Cards, loans
to small business and referrals for Car Loans.
A holistic proposition on Trade Services coupled with Credit facilities
helped the Bank create a Profitable segment of customers. The Bank also
launched 2 commercial branches aimed at servicing the specific needs of its
trade customers.
In the Retail Institutional business the Bank received empanelment from
some states and was able to add many reputed Trusts, Associations, Educational
Institutions and Societies to its list of clients. The Corporate Salary
Accounts business continued to add to its marquee clients across the country
and has shown a steady growth in deposits.
The Bank developed and launched customer centric product programs
specifically aimed at HNIs and NRIs. These product programs with its enhanced
and enriched features make its unique offerings in the respective customer
segments. The Bank has also put in significant investment in technology to
provide world class experience to these specific customer segments. The Bank
successfully launched best in class, Private Banking System for its Privy
League customers. A new micro site was created for this segment of customers.
It has also successfully re-launched its upgraded site for Non Resident
Indians. This website provides a compendium of information required by NRIs
across banking and investment and loan products. Non Resident segment continues
to be a major thrust area for the business. There has been a growth of 46% on
the NRI deposits. The Bank was also selected as a strategic partner to Overseas
Indians Facilitation Centre an initiative of Ministry of Overseas Indian
Affairs. The Bank also operationalised its Representative Office in
On Investment Advisory side, this year saw the market volumes going
through huge gyrations. The uncertainty among customers impacted distribution
volumes for Mutual Fund and Insurance products. In spite of all these changes
in the environment the Bank succeeded in growing its third party distribution
volumes for Mutual Funds and Insurance. The Bank continues to offer a best in
class bouquet of investment products to its customers.
Several new products, features and services were added during the year.
A lower variant current account product for the micro and small business
enterprise was launched. Priority banking was extended to NRIs. All branches of
the Bank were ASBA (Application Supported by Blocked Account) enabled. The Bank
was chosen as one of the few banks to accept applications under the New Pension
Schemes. The Bank now accepts NPS applications across 150 branches. Customized
One View page and customized Net offers were launched based on each individual
customers relationship with the Bank. In Phone Banking a new state of the art
IP based call centre solution was installed this has helped in faster response
rates to customer calls and optimizing call centre resources across multiple
locations.
This year saw the Bank embarking on a journey to use Service as a
differentiator in the highly competitive banking space. In line with this
philosophy the Bank took big strides in improving Customer Satisfaction levels
by raising its Service Quality standards. Implementation of world class CRM
platform which began last year was successfully completed during the year. The
benefits from such robust sales and service oriented Customer Relationship Program
enables the Bank to strive for best in class sales productivity and high
service standards. Coupled with this technology driven platform, the Bank also
launched process driven program titled SPIRIT which focuses on quality and
consistency for service delivery across all channels.
Focus on transaction security has always been at the centre while
designing and implementing business solutions which encourages customer to use
alternate channels like Net banking, ATMs, Mobile/SMS banking, Home banking
etc. During the year, several improvements to existing features like, On line
password generation, two factor authentication, improved features for security
of fund transfers, PIN based IVR were introduced. A very fine balancing act
between security and process controls vis-ŕ-vis customer service is a critical
aspect of this business and requires continuous evaluation of processes and
features keeping in mind customer feedback.
As they move ahead, the primary focus for the Bank would be to ensure
enhanced Customer Profitability by achieving better Cross Sales through well
defined Customer Engagement Programs and Higher Service Quality Standards.
Having emerged as the most critical distributor for the entire groups products
across Liabilities, Assets and Investment products the business will continue
to expand by adding more branches and drive productivity, efficiency and
through put across products, locations, channels and act as the one stop shop
for all customers of the Group.
The Bank continued its in depth coverage of large corporate and mid
market corporate clients during the year. The Bank was able to build
significant franchise with many well known, reputed large corporate groups
during this year while focusing on deepening existing clients through an array
of customized offerings.
The year saw mixed trend in credit demand from the corporate and mid
market business segments both for working capital and term facilities. The last
quarter saw a surge in credit demand as compared to the earlier quarters. This
is in keeping with the economic and corporate investment cycle. The Bank was
able to tap this opportunity and increase its share of business by offering a
variety of products and services.
Trade Finance volumes grew by over 80% vis-ŕ-vis last year. The fund
based trade assets nearly doubled this year as compared to last year and the
non fund based trade assets grew by around 60%. The Banks dedicated team of
trade finance experts strives to provide structured solutions to suit to the
customers needs. The in-depth understanding of the customers business and the
superior delivery models has helped in achieving high levels of customer
satisfaction.
The Bank added 225 new cash management service customers during the year
by offering them technology driven solutions to effectively enhance and
optimize their cash fows and liquidity through an entire suite of CMS products
and services. This has been made possible through constant innovation and a high
degree of customization to cater to the dynamic and evolving industry scenario.
The Commercial Vehicle and Infrastructure sectors showed remarkable
resilience to get back into the growth mode all through the year, picking up
momentum on the way. This has resulted in higher than budgeted disbursement
numbers and bottom line in the Commercial Vehicle and Infrastructure divisions.
Freight rates and order book size have increased which has improved
realisations consequent to better operator and contractor margins. GDP numbers
and the emphasis on infrastructure as a policy measure should spur the growth
in both these sectors, going forward. The businesses have been realigned to
meet the growth demands both on the retail and strategic customer segments.
Despite the fear of a bad monsoon and a rising food prices inflation,
the Agri sector continued to show resilience in repayments. In this backdrop,
the Agri business continued to show growth and crossed Rs.31500.000 millions
this year, up from Rs.23650.000 millions in the last year, in the process
crossing the required 18% of the Net Bank Credit stipulated by Reserve Bank of
The focus of the Agri business continued in activities like Tractor
loans, crop loans, agriculture project financing, working capital facilities to
agriculture and agro processing facilities where it consolidated its presence
in its existing markets. The Agri business also built up business volumes in
fresh segments like gold loans and microfnance loans in the rural sector as
part of the financial inclusion initiatives of the Bank.
The year started cautiously with declining demand in the Home Finance
business, as the customer adopted a policy of wait and watch. However, post the
stable election results the market received a boost. The Bank has taken great
strides in achieving robust sales and Profit numbers. Competitive pricing
resulted in an upsurge in disbursements as compared to previous years. There
was a major focus on Bank branches as a channel for sourcing Home Finance
business.
In the Personal Finance business, there was an opportunity for lenders
to capitalize on the latent loan demand in the market and focus on high-ticket
products, with most lenders still being wary of the low-ticket unsecured
segments. Collection efficiencies showed an improved trend. The Bank continued
its stress on quality based underwriting for fresh bookings.
It has been a roller coaster year for the Asset Reconstruction business.
The first half of the financial year was challenging one in terms of
resolution. However in the second half,
with markets easing and several of the assets having been sold, substantial
amount of recoveries were made. If the buoyancy in the market continues, the Bank
hopes to recover substantial amount in the coming financial year, as well.
Acquisition of new portfolio continued to be lukewarm, but the same is expected
to improve in the coming financial year.
On Treasury side, the Bank has an active proprietary desk trading in all
products such as Fixed Income, Money Markets, Derivatives, Foreign Exchange and
Bullion. The Treasury plays an important role in balance sheet management and
implementation of Funds Transfer Price between various business units. In the
area of Debt Capital Markets (DCM) the Bank offered the following products:
syndication of loans, bonds, mezzanine financing, promoter funding and
acquisition financing and securitisation.
The Bank launched credit card business and reached the milestone of 1
lac cards in the first year of operations. The card design and product benefits
have received overwhelming response from customers. The customer spends across
all variants of cards have been amongst the top three in industry. This has reaffrmed the customer acceptability
of the product. Credit Card business clocked Rs.5110.000 millions of total
spends in the year with a book size of Rs.2810.000 millions. Industry credit
cards spends growth rate has witnessed slowdown owing to current market
conditions.
The Bank entered into a Strategic arrangement with Bharti Group for
their foray into the retail business along with Walmart to distribute Credit
Card products in their retail outlets, targeting both individual and business
users. This partnership opens up the opportunity to tap new markets and new
customer segment hitherto untapped by the Bank. The card aimed at business
users offers one of its kind 14-day credit free cycle that starts afresh on
every purchase.
After consolidation of the data centers last year, the primary focus
this year has been on facilitating green energy initiatives. As a part of this
strategy a transformational project of virtualizing a majority of the servers
in the data center, was executed. Thereby saving on power consumption and
enabling redeployment of the existing servers for future expansion. There was
continued focus on enhancement of customer experience across all channels.
Interactions with Corporate customer applications were also enhanced.
Innovative technology solutions were introduced to support new product
offerings. As in the previous years, the Banks technology continued to be
recognized for its excellence. The Bank received awards for storage
virtualization and e-Governance.
SUBSIDIARIES
The Bank along with its subsidiaries offers complete financial solutions
to its customers. The key business segments where the subsidiaries operate
include investment banking, stock broking, car finance, asset management and
life insurance.
Due to improved business environment, the lending businesses have reported
good Profits compared to last year. The life insurance subsidiary, Kotak
Mahindra Old Mutual Life Insurance Limited has continued to report Profit.
Kotak Mahindra Capital Company Limited, Kotak Mahindra Asset Management Company
Limited, Kotak Securities Limited and the international subsidiaries posted
higher Profits due to strong capital markets and the good domestic economic
growth.
The various activities of the subsidiaries are outlined in the
Management Discussion and Analysis section appended to this Report.
In terms of the approval granted by the Central Government vide their
letter dated 16th February 2010 under Section 212(8) of the
Companies Act, 1956, abridged Annual Report which consists of the financial
statements of the Bank on standalone basis as well as consolidated financial
statements of the group for the year ended 31st March 2010, have been sent to
all the members of the Bank. It does not contain Annual Reports of the Banks
subsidiary companies. The Bank will make available full Annual Report
(including the Annual Reports of all subsidiaries) upon request by any member
of the Bank. These Annual Reports will be available on the Banks website and
will also be available for inspection by any member at the Registered Office of
the Bank.
DIRECTORS
Mr. Shishir Bajaj resigned as a Director of the Bank with effect from 26th
October 2009. The Directors place on record their appreciation for the valuable
advice and guidance rendered by Mr. Bajaj during his tenure as a Director of
the Bank.
Mr. Anand Mahindra and Mr. Cyril Shroff, Directors of the Bank retire by
rotation at the Twenty Fifth Annual General Meeting and are eligible for
re-appointment.
Dr. Sudipto Mundle was appointed as an Additional Director of the Bank
with effect from 27th October 2009 and, pursuant to the proviso to Section 260
of the Companies Act, 1956, holds office as a Director up to the date of this
Annual General Meeting but is eligible to be appointed as a Director. In terms of Section 257 of the Companies Act,
1956 the Bank has received notice in writing from a member along with a
requisite deposit of Rs. 500/- proposing the candidature of Dr. Sudipto Mundle
for his appointment as a Director.
Dr. Sudipto Mundle, a Ph. D in Economics was a Director in the Strategy
and Policy Department, Asian Development Bank. He is an Emeritus Professor
(Hon.) at National Institute of Public Finance and Policy, a Member of the
National Statistical Commission, and President of PREETI Foundation. In his
earlier career, Dr. Mundle was Reserve Bank of India Chair Professor at the
National Institute of Public Finance and Policy,
Indian economy back on track in 2009-10
The onset of the global financial crisis had interrupted
The recovery of the Indian economy started in the 1st quarter of 2009-10
when the GDP growth bounced back to around 6.1% from the previous quarter’s
5.8%. The recovery strengthened significantly especially from the 2nd
quarter of 2009-10, driven by a strong momentum in the industrial output and a
better performance of the service sector. The monsoon was erratic with June –
September 09 period showing a significant shortfall, but despite the widespread
drought and relatively poor agriculture production in 2009-10, the Indian
economy is expected to grow at 7.2% in 2009-10 as per the advance estimates
released by the Central Statistical Organization.
The recovery story of the Indian economy is also evident from the side
of the Index of Industrial Production (IIP), which was led by the manufacturing
sector with the average growth at 10.5% in April 2009 to February 2010 compared
to 3.1% in the similar period last year. A sharp recovery in the capital goods
segment is also indicative of rising investment demand.
Headline WPI inflation remained significantly volatile in 2009-10, and
closer to the end of the FY 10, the pace of increase in the prices became a
concern. Rising food prices, increase in the prices of domestic petrol and
diesel and also a waning of the base effect of the last year accounted for the
sharp rise in the Headline WPI inflation. While prices of most of non-food
commodities moved in line with the international commodity prices, domestic
food prices exhibited contrarian movement in relation to the respective
international prices.
As per the latest monthly data available on WPI, Headline WPI inflation
was at 9.9% in March 2010. There are signs that the high food prices are
getting transmitted to other non-food items, thereby creating concerns over a
more generalized inflation in the months ahead. Consumer price inflation had
also been on the rise through 2009-10. In April 2009 CPI-Industrial workers was
at 8.70% but this gradually increased to 14.86% in February 2010 after peaking
at 16.22% in January 2010.
In 2008-09 the monetary policy was prioritized towards arresting
moderation in growth and by the end-March 2009, RBI had reduced the CRR and the
Repo Rate by 400 bps each (to 5.00% for both) from its peak levels while the
Reverse Repo rate was reduced from 6.00% to 3.25%, a drop of 275 bps. In the
course of 2009-10 the stance of monetary policy was geared towards supporting
early recovery of the growth momentum while facilitating the large borrowing
programme of the Government. RBI has been continuously monitoring the inflation
and has taken steps during the year to address these. In October 2009, the
mandatory SLR requirement was restored back to its earlier level of 25% of
NDTL. The CRR requirement was raised by 75 bps on January 29th to end FY10 at
5.75%. On the other hand, the Repo as also the Reverse Repo rates was increased
by 25 bps each on 19th March 2010. While the Reverse Repo rate at the end of the
FY was at 3.50%, the Repo rate ended the FY at 5.00%.
Liquidity conditions remained hugely in surplus in 2009-10 and thus the
money market conditions remained largely orderly. The collateralized segment
remained the predominant segment of the money market and accounted for more
than 80% of its total volume. About 75% of the lending in the collateralized
segment was contributed by mutual funds.
10-year G-Sec yields movements can be categorized into 3 distinct phases.
In the first phase (April 2009), 10-year G-Sec yield dropped sharply from 7.01%
to 6.23%, in the 2nd phase (May-August 2009), benchmark 10-year yield started
to increase as the size of primary auctions were higher (from Rs.120000.000
millions to Rs.150000.000 millions) By end-September the 10-year yield rose to
7.17%. In the 3rd phase G-sec yields witnessed ranged trades before exhibiting
a hardening bias on the back of lack of OMO purchase auctions in the second
half of the FY; consequently the 10-year G-sec yield was at 7.72% by
mid-January 2010 and also increased to above 8.0% in early March, 2010. 10-year
yield softened to close the FY10 at around 7.85% The weighted average yield of
dated securities in H1 of 2009-10 was at 7.18% which increased to 7.72% in H2,
bringing the average for the year at 7.36%. The higher weighted average yield
in H2 was due to the lengthening of the borrowing maturity in H2 to 11.70 years
compared to 10.93 years in H1. For the full year 2009-10 the weighted average
maturity was at 11.16 years.
In 2008-09, the adverse impact of the global financial market turmoil
was felt in the form of a reversal of FIIs inflows and decline in long-term and
short-term debt flows. As the global financial markets stabilized, flows into
the Indian economy through FII, FDI and most of the debt categories improved.
Further, the outcome of the general elections created positive market
sentiments on reforms and disinvestments, leading to a sharp move up in the
equity markets. These led to an appreciation for the rupee against USD, from
around Rs. 51 per USD in end-March 2009, ending the FY10 at around Rs. 44.92
per USD.
During the year the Bank won the following awards:
·
Adjudged amongst the Top 25 ‘Best Employers in
India 2009’ by Hewitt Associates
·
IDRBT’S Special award for IT Governance and Value
Delivery
·
Awarded ‘Best Companies to Work For in 2009’ by
Great Places to Work Institute
·
IDG India’s CIO 100 ‘Ingenious 100’ award and the
CIO 100 ‘Storage Virtualization’ award.
·
Ranked No. 2 in
·
Awarded ‘Best Local Cash Management Bank’ by
Asiamoney 2009.
As at March 31, 2010 the Bank has built a network of 249 full fledged
branches spread across 145 locations and 492 ATMs. The Bank proposes to double
its branch network over the next three years. Kotak Mahindra Capital Company
and Kotak Securities reported good financial performance on the back of strong
capital markets and improved economic environment.
The life insurance subsidiary, Kotak Mahindra Old Mutual Life Insurance
(KLI) continued its growth momentum and posted significant growth in profits.
Assets under management (AUM) as at 31st March 2010 was over
Rs.452240.000 millions (approximately USD 10 bn) comprising assets managed and
advised by the Group. Of this, equity assets managed / advised by the Group
were around Rs.216120.000 millions. The AUM with Kotak Mahindra Mutual Fund
(Kotak Mutual) was over Rs.240000.000 millions.
OUTLOOK
Kotak Mahindra Group’s results for the financial year demonstrate the
strong fundamental growth in the
The Group believes that the present economic scenario offers immense
opportunities for it to grow in scale and reach coupled with value creation.
BOARD OF DIRECTORS
Dr. Shankar Acharya, Non-Executive Part-time Chairman
Dr. Shankar Acharya, B.A. (Hons.) from
Mr. Uday Kotak, Executive Vice-Chairman and Managing Director
Mr. Uday Kotak, B.Com, MMS (Masters in Management Studies), aged 51
years, is the Executive Vice-Chairman and Managing Director of the Bank and its
principal founder and promoter. Over the past 24 years, he has built a team of
professionals who have been given independent charge of various businesses in
Kotak Mahindra group. He was responsible for starting the business as a
start-up venture in a limited range of activities and then building it up into
a full financial services group, many of the constituents of which are among
the leading players in their respective fields. He is a Governing Member of The
Mahindra United World College of India and Member of the Executive Board of
Indian School of Business.
The Group is confident that with its integrated business model it shall
be able to take advantage of the significant growth opportunities in the coming
years.
He is on the Board of the following companies:
·
Kotak Forex Brokerage Limited
·
Kotak Mahindra Asset Management Company Limited
·
Kotak Mahindra Capital Company Limited
·
Kotak Mahindra Prime Limited
·
Kotak Mahindra Old Mutual Life Insurance Limited
·
Kotak Securities Limited
Mr. Uday Kotak is also a member of the Investor Relations
(Shareholders’/Investors’ Grievance) Committee of the Bank, Chairman of the
Audit Committees of Kotak Mahindra Capital Company Limited and Kotak Securities
Limited and member of the Audit Committee of Kotak Mahindra Asset Management
Company Limited.
Mr. Anand Mahindra
Mr. Anand Mahindra, aged 55 years, a graduate of
·
Angular Constructions Private Limited
·
Araku Originals Limited
·
Avion Aerosols Private Limited
·
Bristlecone Limited,
·
Mahindra First Choice Wheels Limited
·
M.A.R.K. Hotels Private Limited
·
Mahindra Forgings Limited
·
Mahindra and Mahindra Limited
·
Mahindra Sona Limited
·
Mahindra Ugine Steel Company Limited
·
Mahindra Navistar Automotives Limited
·
Mahindra Holdings Limited
·
Mahindra Two Wheelers Limited
·
National Aviation Company of India Limited
·
National Stock Exchange of India Limited
·
Prana Holdings Inc.
·
Tech Mahindra Foundation
·
Tech Mahindra Limited
He is a member of the Share Transfer and Shareholders’/Investors’
Grievance Committee of Mahindra and Mahindra Limited.
Mr. Cyril Shroff
Mr. Cyril Shroff, B.Com, L.L.B., aged 50 years, is a Solicitor, High
Court, Mumbai and Advocate on record, Supreme Court of India. He is the
managing partner of the law firm M/s. Amarchand and Mangaldas and Suresh A.
Shroff and Company and practices in the area of corporate law and project
finance. He has been a member of numerous Government committees. He is also on
the Board of Grasim Industries Limited. Mr. Cyril Shroff is also a partner in
M/s. Suresh A. Shroff and Company and M/s. Amarchand Mangaldas and
Hiralal Shroff and Company
Mr. Cyril Shroff is the Chairman of the Shareholders’
Grievance/Allotment and Transfer Committee of Grasim Industries Limited.
Mr. Shivaji Dam
Mr. Shivaji Dam, B.Com, AICWA, ACA, ACS, aged 53 years, has a strong
accounting and cost accounting background with over 26 years experience, of which
19 years have been with the Kotak Group. He has experience in fields such as
corporate finance, proprietary investments, investment banking and operating
management within the Kotak Group. He led the Kotak Group into the life
insurance business and was managing director of Kotak Mahindra Old Mutual Life
Insurance Limited, a subsidiary of the Bank, for four years. He is on the Board
of the following companies:
·
Kotak Mahindra Old Mutual Life Insurance Limited
·
Kotak Mahindra Trusteeship Services Limited
·
Kotak Mahindra Pension Fund Limited
Mr. Shivaji Dam is a member of the Audit Committee of the Bank and Kotak
Mahindra Old Mutual Life Insurance Limited.
Mr. C. Jayaram, Executive Director
Mr. C. Jayaram, B. A. (Economics), PGDM-IIM, Kolkata, aged 54 years, is
an Executive Director of the Bank and is currently in charge of the Wealth
Management Business of the Kotak Group. He also oversees the international
subsidiaries and the alternate asset management business of the group.
He has varied experience of over 32 years in many areas of finance and
business and was earlier the Managing Director of Kotak Securities Limited. He
has been with the Kotak Group for 20 years and has been instrumental in
building a number of new businesses at Kotak Group. Prior to joining the Kotak
Group, he was with Overseas Sanmar Financial Limited He is also on the Board of
the following companies:
·
Kotak Investment Advisors Limited
·
Kotak Mahindra Asset Management Company Limited
·
Kotak Mahindra Investments Limited
·
Kotak Mahindra Inc
·
Kotak Mahindra Prime Limited
·
Kotak Mahindra (
·
Kotak Securities Limited
Mr. C. Jayaram is a member of the Audit Committee and Investor Relations
(Shareholders’/Investors’ Grievance) Committee of the Bank and Audit Committee
of Kotak Securities Limited.
Mr. Dipak Gupta, Executive Director
Mr. Dipak Gupta, B.E. (Electronics), PGDM-IIM, Ahmedabad, aged 49 years,
is an Executive Director of the Bank and has over 24 years of experience in the
financial services sector, 18 years of which have been with the Kotak Group. He
is in charge of the retail business and banking operations, and was responsible
for leading the Kotak Group’s initiatives into the banking arena. Prior to
this, he was the Executive Director of Kotak Mahindra Prime Limited. Prior to
joining the Kotak Group, he was with AF Ferguson and Company for approximately
six years. He is on the Board of the following companies:
·
Kotak Forex Brokerage Limited
·
Kotak Mahindra Capital Company Limited
·
Kotak Mahindra Investments Limited
·
Kotak Mahindra Prime Limited
·
Kotak Mahindra Old Mutual Life Insurance Limited
Mr. Dipak Gupta is also member of the Investor Relations
(Shareholders’/Investors’ Grievance) Committee of the Bank, Audit Committee of
Kotak Mahindra Prime Limited, Kotak Mahindra Capital Company Limited and Kotak
Mahindra Old Mutual Life Insurance Limited. He is the Chairman of the Audit
Committee of Kotak Mahindra Investments Limited.
Mr. Asim Ghosh
Mr. Asim Ghosh, B.Tech,
·
Jaykay Finholding (
·
UMT Investments Limited
·
Usha Martin Telematics Limited
·
Wanless Property Holdings Private Limited
·
Husky Energy Inc.
Mr. Ghosh is a member of Audit Committees of Jaykay Finholding (
Dr. Sudipto Mundle
Dr. Sudipto Mundle, a Ph.D. in Economics, aged 61 years, was a Director
in the Strategy and Policy Department, Asian Development Bank (ADB). He was
appointed as an Additional Director of the Bank with effect from 27th October
2009. He is an Emeritus Professor (Hon.) at National Institute of Public
Finance and Policy, a Member of the National Statistical Commission, and
President of PREETI Foundation.
In earlier assignments in the ADB, Dr. Mundle gained extensive
experience in economic work and provision of development assistance, including
projects and policy loans for agriculture, infrastructure, including
irrigation, finance, education and health, technical assistance, and regional
cooperation assistance in many countries in
In his earlier career Dr. Mundle was Reserve Bank of India Chair
Professor at the National Institute of Public Finance and Policy,
During the last four decades Dr. Mundle’s research covered a wide range
of themes including the economics of small-scale farming, the determinants of
rural poverty, rural-urban linkages and development policy. His research has
also included macroeconomic policy, public finance, regional development and
micro level planning, and the economics of industry, technology and
environment.
UNAUDITED FINANCIAL RESULTS
FOR THE QUARTER AND HALF YEAR ENDED SEPTEMBER 30, 2010
(Rs.
in millions)
|
Particulars |
Quarter Ended 30th September, 2010 (Unaudited) |
Half Year Ended 30th September, 2010 (Unaudited) |
|
1 Interest earned (a+b+c+d) |
10147.225 |
19355.259 |
|
(a) Interest/ discount on advances/ bills |
7761.403 |
14701.651 |
|
(b) Income on investments |
2344.755 |
4599.548 |
|
(c) Interest on balances with RBI and other banks |
36.348 |
48.831 |
|
(d) Others |
4.719 |
5.229 |
|
2 Other Income |
1393.266 |
2763.995 |
|
3 Total income (1+2) |
11540.491 |
22119.254 |
|
4 Interest expended |
4708.918 |
8835.020 |
|
5 Operating expenses (a+b) |
3564.028 |
6863.270 |
|
(a) Payments to and Provisions for employees |
1687.434 |
3343.631 |
|
(b) Other Operating expenses |
1876.594 |
3519.639 |
|
6 Total expenditure (4+5) |
8272.946 |
15698.290 |
|
7 Operating Profit (3-6) |
3267.545 |
6420.964 |
|
8 Other provisions and contingencies (Refer Note 1) |
455.078 |
1016.026 |
|
9 Exceptional items |
-- |
-- |
|
10 Profit / Loss from Ordinary Activities
before tax (7-8-9) |
2812.467 |
5404.938 |
|
11 Provision for taxes |
865.428 |
1588.866 |
|
12 Net Profit / Loss from Ordinary |
1947.039 |
3816.072 |
|
Activities after tax (10-11) |
-- |
-- |
|
13 Extraordinary items (net of tax expense) |
1947.039 |
3816.072 |
|
14 Net Profit / Loss for the Period (12-13) |
3667.034 |
3667.034 |
|
15 Paid Up Equity Capital - (Face Value Rs.5
per share) (Refer note 2 and 3) |
|
|
|
16 Reserves excluding revaluation reserves |
|
|
|
17 Analytical Ratios |
|
|
|
(i) % of shares held by Govt. of India |
|
|
|
(ii) % Capital adequacy ratio (Basel II ) |
19.43 |
19.43 |
|
(iii) Earnings Per Share (EPS) for the period |
|
|
|
- Basic Rs. |
2.72 |
5.40 |
|
- Diluted Rs. |
2.70 |
5.36 |
|
(iv) NPA Ratios |
|
|
|
a) Gross Non-performing assets |
7511.388 |
7511.388 |
|
b) Net Non-performing assets |
2530.111 |
2530.111 |
|
c) % of Gross NPA to Gross Advances |
2.78 |
2.78 |
|
d) % of Net NPA to net Advances |
0.95 |
0.95 |
|
e) % of Gross NPA to Gross Advances (excluding NPAs acquired from
other banks and NBFCs) |
1.82 |
1.82 |
|
f) % of Net NPA to net Advances (excluding NPAs acquired from other
banks and NBFCs) |
0.68 |
0.68 |
|
g) Return on Assets %(Average) – Not Annualized |
0.44 |
0.44 |
|
18 Public Shareholding |
|
|
|
(i) No. of shares |
397595174 |
397595174 |
|
(ii) % of shareholding |
54.21% |
54.21% |
|
19 Promoters and promoter group Shareholding |
|
|
|
a) Pledged/Encumbered |
|
|
|
- Number of shares |
100000 |
100000 |
|
- Percentage of shares (as a % of the total shareholding of promoter
and promoter group) |
0.03% |
0.03% |
|
- Percentage of shares (as a% of the total share capital of the
company) |
0.01% |
0.01% |
|
b) Non-encumbered |
|
|
|
- Number of Shares |
335693268 |
335693268 |
|
- Percentage of shares (as a% of the total shareholding of promoter
and promoter group) |
99.97% |
99.97% |
|
- Percentage of shares (as a % of the total share capital of the
company) |
45.77% |
45.77% |
Segment Results
The reportable segments of the bank are as under:
|
Segment |
Principal
activity |
|
Treasury and BMU |
Money market, forex
market, derivatives, investments and primary dealership of government
securities and Balance Sheet Management Unit (BMU) responsible for Asset
Liability Management. |
|
Retail Banking |
Includes lending, deposit taking and other services/ products including
credit cards. |
|
Corporate/Wholesale Banking |
Wholesale
borrowings and lendings and other related services to the corporate sector
which are not included under retail banking |
(Rs.
in millions)
|
Particulars |
Quarter Ended 30th September, 2010 (Unaudited) |
Half Year Ended 30th September, 2010 (Unaudited) |
|
1 Segment Revenue |
|
|
|
a. Treasury and BMU |
3367.191 |
6607.933 |
|
b. Corporate/ Wholesale Banking |
3788.855 |
6937.679 |
|
c. Retail Banking |
7175.007 |
13829.672 |
|
Sub-total |
14331.053 |
27375.284 |
|
|
|
|
|
Less : Inter-segmental revenue |
2793.140 |
5258.608 |
|
Add : Unallocated Income |
2.578 |
2.578 |
|
Total |
11540.491 |
22119.254 |
|
|
|
|
|
2 Segment Results |
|
|
|
a. Treasury and BMU |
552.039 |
1411.111 |
|
b. Corporate/ Wholesale Banking 09 |
1382.231 |
2431.259 |
|
c. Retail Banking |
875.619 |
1559.990 |
|
Sub-total |
2809.889 |
5402.360 |
|
|
|
|
|
Add : Unallocated Income /(expense) |
2.578 |
2.578 |
|
|
|
|
|
Total Profit Before Tax |
2812.467 |
5404.938 |
|
|
|
|
|
3 Capital employed (Segmental Assets less Segmental Liabilities) |
|
|
|
a. Treasury and BMU |
20737.255 |
20737.255 |
|
b. Corporate/ Wholesale Banking |
15224.996 |
15224.996 |
|
c. Retail Banking |
25406.765 |
25406.765 |
|
Sub-total |
61369.016 |
61369.016 |
|
|
|
|
|
Add: Unallocated |
1915.330 |
1915.330 |
|
|
|
|
|
Total Capital Employed |
63284.346 |
63284.346 |
Notes
1. Provisions and contingencies
are net of recoveries made against accounts which have been written off as bad
in the previous period/ year.
2. In August 2010,
the Bank allotted 1,64,00,000 equity shares of Rs. 10/- each at a premium of
Rs.823/- per equity share for a total consideration of Rs.13661.200 millions on preferential
basis to Sumitomo Mitsui Banking Corporation.
3. Each equity
share of the Bank having face value of Rs.10 fully paid-up was sub-divided into
two equity shares of the face value of Rs.5 each fully paid-up in September
2010. Accordingly the number of shares in the previous periods have been
restated to make them comparable. In accordance with Accounting Standard 20 on
Earnings Per Share, the Bank has given effect to the sub-division of shares in
computing the earnings per share for the previous periods.
4. During the
quarter, the Bank has not granted any options under employee stock option
scheme. Stock options aggregating to 34,17,906 (Post Split) were exercised
during the quarter and 1,64,68,520 (Post Split) stock options were outstanding
with employees of the Bank and its subsidiaries as at 30th September, 2010.
5. The Bank had no
outstanding shareholder complaints as at 30th June, 2010. During the quarter,
the Bank received 14 complaints from shareholders out of which 1 compliant was
pending as at 30th September, 2010, which has subsequently been resolved.
6. Figures for the
previous period/year have been regrouped wherever necessary to conform to
current period’s presentation.
7. There has been
no change in significant accounting policies during the quarter.
8. The results for
the quarter ended 30th September, 2010 have been subjected to a “limited
review” by the statutory auditors of the Bank.
9. The summarized Balance Sheet of the Bank (standalone) is given below:
(Rs.
in millions)
|
Particulars |
As at 30th
September 2010 |
|
Summarised Balance Sheet |
|
|
CAPITAL AND LIABILITIES |
|
|
Capital |
3667.034 |
|
Reserves and Surplus |
59617.312 |
|
Employees’ Stock Options (Grants) Outstanding |
350.018 |
|
Deposits |
282869.664 |
|
Borrowings |
80773.884 |
|
Other Liabilities and Provisions |
32575.673 |
|
TOTAL |
459853.585 |
|
|
|
|
ASSETS |
|
|
Cash and balances with Reserve Bank of |
20524.343 |
|
Balances with Banks and Money at Call and Short Notice |
11517.239 |
|
Investments |
139351.958 |
|
Advances |
265066.364 |
|
Fixed Assets |
4045.923 |
|
Other Assets |
19347.758 |
|
TOTAL |
459853.585 |
CONTINGENT LIABILITIES:
|
Particulars |
31.03.2010 (Rs. In millions) |
|
Claims not acknowledged as debts |
809.864 |
|
Liability on account of outstanding forward exchange contracts |
20839.963 |
|
Guarantees on behalf of constituents in |
19911.705 |
|
Acceptances, endorsements and other obligations |
24143.148 |
|
Other items for which the Bank is contingently liable |
|
|
a) Liabilities in respect of interest rate swaps, currency swaps,
forward rate agreements |
290650.311 |
|
b) Liability in respect of Options Contracts |
12516.018 |
|
c) Capital Commitments not provided |
789.193 |
|
Total |
369660.202 |
FIXED ASSETS:
·
Premises (Including Land)
·
Other Fixed Assets (Including
Furniture and Fixture)
WEBSITE DETAILS:
BUSINESSESS:
Kotak Mahindra is one
of
Subject is a one stop shop
for all banking needs. The bank offers personal finance solutions of every kind
from savings accounts to credit cards, distribution of mutual funds to life
insurance products. Kotak Mahindra Bank offers transaction banking, operates
lending verticals, manages IPOs and provides working capital loans. Kotak Bank
has one of the largest and most respected Wealth Management teams in
Their Story
Milestones that have shaped the Kotak Mahindra Group, since 1986
Since the inception of the erstwhile Kotak Mahindra Finance Limited in
1985, it has been a steady and confident journey leading to growth and success.
The milestones of Kotak Mahindra's growth story are listed below by year.
Subject opened a
representative office in Dubai Entered Ahmedabad Commodity Exchange as anchor
investor.
2008 Launched
a Pension Fund under the New Pension System.
2006 Bought the 25% stake held by
Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities.
2005 Kotak Group realigned joint
venture in Ford Credit; their stake in Kotak Mahindra Prime was bought out
(formerly known as Kotak Mahindra Primus Limited) and Kotak group’s stake in
Ford credit Kotak Mahindra was sold.
Launched a real estate fund.
2004 Launched
2003 Kotak Mahindra Finance Limited
converted into a commercial bank - the first Indian company to do so.
2001 Matrix sold to Friday Corporation.
Launched Insurance Services.
2000 Kotak Mahindra tied up with Old
Mutual plc. for the Life Insurance business.
Kotak Securities launched its on-line broking site.
Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund.
1994 Kotak Securities Limited was incorporated
1992 Entered the Funds Syndication sector
1991 The Investment Banking Division
was started. Took over FICOM, one of
1990 The Auto Finance division was started
1987 Kotak Mahindra Finance Limited entered the Lease and Hire Purchase market
1986 Kotak Mahindra Finance Limited
started the activity of Bill Discounting
PRESS RELEASES
KOTAK MAHINDRA BANK
ANNOUNCES Q2 FY11 RESULTS
Bank PAT for Q2FY11
up 55% to 
1950.000 MILLIONS
Consolidated PAT for Q2FY11
up 21% to 3640.000 MILLIONS
Mumbai, October 20, 2010: The Board of Directors of Kotak Mahindra Bank ('Kotak Bank') took on record unaudited consolidated and stand-alone results for Q2FY11, at the board meeting held in Mumbai, today.
Consolidated results at a glance
Consolidated PAT 3640.000 millions in Q2FY11 up 21 % from 3000.000 millions in Q2FY10.
Consolidated PAT for H1FY11 up 24% to 6920.000 millions from 5570.000 millions in H1FY10.
Consolidated advances up 40% to 375150.000 millions as on September 30, 2010
from 267720.000 millions as on September 30, 2009.
Consolidated quarterly annualised NIM for Q2FY11 stood at 5.6% (Q2FY10 - 5.9%).
Consolidated capital adequacy ratio as per Basel II as on September 30, 2010 is 17.2%. Tier 1 is 15.7%.
Total assets managed / advised by the Group as on September
30, 2010 were 497 bn (September 30, 2009 539 bn; March 31, 2010 452 bn).
In August 2010, Kotak Bank allotted 1.64 cr. equity shares
of 10/- each at a premium of 823/- per equity share for a total
consideration of 13660.000 millions on preferential basis to Sumitomo
Mitsui Banking Corporation.
In September 2010, each equity share of the Bank having face
value of 10 fully paid-up was sub-divided into two
equity shares of the face value of 5 each fully paid-up.
Some of the key consolidated ratios are as under:
|
|
As on Sept 30, 2010 |
As on Sept 30, 2009 |
As on Mar 31, 2010 |
|
Networth (Rs. in millions) |
100600.000 |
71290.000 |
79110.000 |
|
Book value per share * ( |
137.2 |
102.8 |
113.6 |
|
Net Interest Margin # (%) |
5.6% |
5.9% |
6.1% |
*
Adjusted for split
# Annualised for the quarter
Details of the entity wise profit after tax are as under:
|
Rs.
in millions |
Q2FY11 |
Q2FY10 |
H1FY11 |
H1FY10 |
FY10 |
|
Kotak Mahindra Bank (Standalone) |
19470.000 |
1259.000 |
3816.0000 |
2162.000 |
5611.000 |
|
Kotak Mahindra Prime |
613.000 |
395.000 |
1373.000 |
584.000 |
1664.000 |
|
Kotak Securities |
517.000 |
759.000 |
991.000 |
1501.000 |
2601.000 |
|
Kotak Mahindra Capital Company |
73.000 |
41.000 |
142.000 |
90.000 |
239.000 |
|
Kotak Mahindra Old Mutual Life Insurance |
134.000 |
44.000 |
65.000 |
55.000 |
6920.000 |
|
Kotak Mahindra AMC and Trustee Co |
(24.000) |
195.000 |
65.000 |
348.000 |
725.000 |
|
International subsidiaries |
123.000 |
208.000 |
279.000 |
439.000 |
803.000 |
|
Kotak Investment Advisors |
105.000 |
95.000 |
214.000 |
213.000 |
398.000 |
|
Kotak Mahindra Investments |
80.000 |
87.000 |
156.000 |
217.000 |
347.000 |
|
Others |
(11.000) |
(1.000) |
(1.000) |
(2.000) |
(5.000) |
|
Total consolidated profit after tax |
3568.000 |
3082.000 |
7101.000 |
5607.000 |
13074.000 |
|
Affiliates, minority interest and other adjustments |
73.000 |
(85.000) |
(183.000) |
(36.000) |
(4.000) |
|
PAT (after minority interest / adjustments) |
3641.000 |
2998.000 |
6918.000 |
5571.000 |
13070.000 |
Kotak Mahindra Bank stand-alone results
Bank (Standalone) PAT for Q2FY11 up 55% to 1950.000 millions from 1260.000 millions in Q2FY10.
Bank (Standalone) PAT for H1FY11 up 76% to 3820.000 millions from 2160.000 millions in H1FY10.
Net Interest Income (NII) of the Bank (Standalone) for
Q2FY11 up 25% yoy to 5440.000 millions from 4370.000 millions in Q2FY10.
The Bank achieved the provision coverage ratio of 70% on its non performing assets as stipulated by RBI as on September 30, 2010.
Bank had 267 full-fledged bank branches (230 branches as on September 30, 2009) across 154 locations and 585 ATMs as on September 30, 2010.
Deposits as on September 30, 2010 were up 50% to 282870.000 millions ( 189150.000 millions as on September 30,
2009, 238860.000 millions as on March 31, 2010).
CASA deposits comprised 31.9 % of total deposits as on September 30, 2010. (September 30, 2009 – 28.8%; March 31, 2010 – 31.2%).
Capital adequacy ratio of the Bank as per Basel II as on September 30, 2010 is 19.4%. Tier 1 is 17.2%.
Segmental results
breakup:
|
Segmental
PBT - |
Q2FY11 |
Q2FY10 |
H1FY11 |
H1FY10 |
FY10 |
|
Treasury and BMU* |
550.000 |
710.000 |
1410.000 |
1590.000 |
3680.000 |
|
Corporate/Wholesale Banking |
1380.000 |
1030.000 |
2430.000 |
1600.000 |
3860.000 |
|
Retail Banking |
880.000 |
(60.000) |
1560.000 |
(250.000) |
610.000 |
|
Unallocated income and inter-segment
revenue |
- |
- |
- |
- |
(30.000) |
|
Total |
2810.000 |
1670.000 |
5410.000 |
2940.000 |
8110.000 |
MillionsCMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject are
derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or investigation
registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.25 |
|
|
1 |
Rs.71.42 |
|
Euro |
1 |
Rs.59.69 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.