The Hindu Business Line : Kotak Mahindra Bank plans 100 branches by March 2007

Speaking to newspersons here on Friday, the bank's Executive Vice-Chairman and Managing Director, Mr Uday Kotak said, "The branches will be mostly in semi urban and tier two cities." This year, the bank was expected end with 70 branches. Of these, 40 branches would be through conversion of non-bank finance company's network, he said.

The bank currently has a capital-to-risk weighted asset ratio of 13.9 per cent as against the statutorily prescribed 10 per cent. It also had the lowest net non-performing assets ratio of 0.38 per cent.

Mr Kotak said that currently the bank's operations were concentrated in Punjab and Gujarat. The bank currently had a deposit base of Rs 6,500 crore and Rs 5,000 crore as advances. The build up advances was lead by a retail lending, he said. Retail business comprised at least 70 per cent of its operations.

The bank, he said, had also opened a representative office in Dubai and hoped to have a full-fledged office in Singapore as well, after receipt of statutory clearances.

But the bank was also active in the taking out of stressed assets from other banks. Mr Kotak said the bank had so far taken out assets with a gross loan value equivalent to Rs 1,500 crore. These included 300 large companies and SMEs (small and medium enterprises). Taking out of stressed assets would be an ongoing business and comprised part of its advances.

He said that bank's intention was to grow as an integrated financial super market to take advantage of the changing savings patterns in the country. Currently, only about two per cent of the domestic savings was channelled into the equities market.

However, he said this would increase to 5 per cent over the next two to three years, and substantial volumes of this incremental accretion would be from the semi-urban and rural regions.

Referring to the private equity business of the Kotak group, he said that it had raised Rs 750 crore, of which 30 per cent had already been invested.