The Hindu Business Line : Kotak Mahindra Bank sees take-outs to spur growth

Mr Uday S. Kotak, Executive Vice-Chairman and Managing Director, Kotak Mahindra Bank, with Mr Dipak Gupta, Executive Director, at a press conference in Bangalore on Thursday. — G.R.N. Somashekar

Bangalore , Jan. 8

KOTAK Mahindra Bank sees regular portfolio take-outs mostly in the auto-loan segment boosting its asset book size, Executive Director, Mr Dipak Gupta, has said.

"We have been doing such deals almost once a month... but the deal sizes are very small," Mr Gupta told Business Line on the sidelines of a conference announcing the bank's Bangalore branch launch. The bank usually buys out small loan portfolios, mainly of heavy vehicles like trucks on a regular basis. The bank currently has an asset book size of Rs 2,500 crore and the consolidated asset book of the group is Rs 5,500 crore.

However, the bank ruled out the possibility of buying any private bank to fuel growth in near term. "We are not looking at such possibility now," Mr Gupta said, adding that the bank would also like to grow its home loan portfolio and would not be interested in buying out other home-loan portfolios. We have to be very careful in choosing the quality of asset when we buy," Mr Gupta said.

Meanwhile, the bank also derives fee-based income from several asset-reconstruction advices and takes over management of bad-loans on behalf of third parties through its asset recovery division, Mr Gupta said. The bank aims to set up 50-75 branches over next three years, of which 25-30 would be in the top three cities, Executive Vice-Chairman & MD, Mr Uday S. Kotak said.

The bank targets clients with a minimum annual household income of Rs 4.5 lakh and feels such population in the country could be eight-nine million. Retail sector, which makes up two-third of the bank's lending portfolio, is likely to drive the growth in advances in future, Mr Kotak said. Quashing notion of the bank catering solely to the affluent urban centric clientele, Mr Kotak said, "We fully meet the RBI's priority sector lending norm of 40 per cent."