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Kotak Mahindra Bank has a unique position in the banking space, thanks to its ability to constantly look at inorganic opportunities in the financial services space. A month back, the grapevine was thick about the Kotak Mahindra Bank expressing interest to acquire its smaller peer in the private space. While the so-called target strongly refuted it, Kotak Mahindra Bank is steadfast in maintaining its stand on acquisitions. In an exclusive interview with businessline, Shanti Ekambaram, Group President and Whole Time Director-Designate, Kotak Mahindra Bank revealed that the bank remains keen on looking at inorganic opportunities. “Kotak is very clear that anything that’s value accretive, we will be open to looking at inorganic opportunities, “she asserted. When asked if the bank would be interested in buying out another bank or a channel of business, Ekambaram kept the options open. “We can acquire customers or portfolios”.
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After reports were refuted, Federal Bank shares surged 8.5% and Kotak Mahindra bank shares rose 2% But stock surrenders gains on clarificationOne of the largest deals done to date in the private banking space is Kotak Mahindra Bank’s acquisition of ING Vysya Bank in 2014. The deal took Kotak Mahindra Bank up the league table by many notches and now, post the YES Bank shake-up, Kotak is in a comfortable fourth position among private banks, with a balance sheet size of ₹4.24 lakh crore as on June 30, 2022. “ING Vysya was an equal-sized bank. They were dominant in the South; we were in the North and West. They have branches in smaller cities, and we were metro-centric, hence it was a fantastic fit for us,” Ekambaram explained while sketching out what would be the bank’s priority while scouting for acquisitions.
Following the ING Vysya deal, Kotak Mahindra Bank acquired BSS Microfinance in 2016 for an all-cash deal of ₹139 crore. This was around the time that RBL Bank and IDFC First Bank also acquired NBFC-MFIs. The bank’s last shopping venture was Volkswagen’s vehicle finance business in September 2021. While with BSS Microfinance, Ekambaram is satisfied with the value that the outfit has created, in Volkswagen’s case she says the “it has given us an excellent customer franchise”.
When asked what the bank’s next pursuit would be, Ekambaram kept her options open. “Every one of our businesses is core to us. Can I say that retail is core and wholesale is not core?”.
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Meanwhile, the bank is clear that all its pursuits would be channelised towards three key factors, which it reckons as the future of financial services business - tech, talent, and customers.
With the plethora of choices opening for customers due to digitisation, Ekambaram says customers expect the same level of product and experience from all their service providers. “Whether it’s the products or delivery of the products, the customer will hold the reigns”.
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