Money & Banking

Will use capital cushion judiciously: Kotak Mahindra Bank

Our Bureau. Mumbai | Updated on October 26, 2020 Published on October 26, 2020

BL21_BNK_KOTAK2

Says there are no plans to takeover IndusInd Bank

Kotak Mahindra Bank, on Monday, said it has a capital cushion, but will use it judiciously even as it declined to comment on reports of its possible takeover of IndusInd Bank.

“We will not talk of any specific examples...but even when we raised capital, we had talked about looking at acquisitions ...companies or assets. We are not saying no to any growth avenues,” said Jaimin Bhatt, Group President and Group Chief Financial Officer, Kotak Mahindra Bank, when asked about possible mergers and acquisitions, but added that the bank would not respond to specific issues.

Addressing queries after the bank’s second quarter results, Bhatt further stressed that having capital is a cushion, but the bank will use it judiciously.

“Just because we have capital doesn’t mean we step up our credit cost. That is the ammunition we have built when we saw Covid...We will have to see whether it is the right opportunity, growing on the organic front,” he noted.

The bank raised ₹7,400 crore through Qualified Institutional Placement (QIP) in May.

IndusInd Bank reacts

Meanwhile, the promoters of IndusInd Bank affirmed unstinted support to the bank and denied any such development.

“The promoter of IndusInd Bank, IndusInd International Holdings Limited (IIHL)completely denies the said rumour and considers it malicious, untrue and baseless. IIHL is promoted by the Hindujas and broad base of other successful NRIs from the overseas Indian diaspora. They reiterate their full support to the IndusInd Bank, now and always,” the promoters said in a statement.

“The promoter would continue to support IndusInd Bank’s initiatives to grow inorganically, should any such opportunities arise on the horizon in the future. It is worth recalling that among the nine original licensees (four institutional and five private) that were allowed to set up banking operations in 1994, IndusInd Bank is the only privately promoted bank that successfully continues its operations because of the promoter support. The promoter reaffirms its unstinted support to the Indusind Bank,” they further said.

IndusInd Bank’s scrip jumped over 4 per cent on Monday, and closed 1.46 per cent higher at ₹616.3 apiece on the BSE.

 

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Published on October 26, 2020
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