Q1 2025 Kotak Mahindra Bank Ltd Earnings Call Transcript
Key Points
- Kotak Mahindra Bank Ltd (BOM:500247) successfully closed the disinvestment of a 70% stake in Kotak General Insurance with Zurich Insurance, generating INR5,560 crores.
- The bank reported a consolidated profit of INR4,435 crore, excluding the KGI transaction, which is about 7% higher than the same quarter last year.
- Advances and deposits both grew at around 20% year on year, with the bank's customer assets growing 20% Y-o-Y and 3% during the quarter.
- The bank's capital adequacy at the group level is robust at 22.8%, with CET1 itself at 21.9%.
- Kotak Securities and Kotak AMC performed well, with Kotak Securities recording an 83% Y-o-Y growth in profit and Kotak AMC's profit up 65% compared to last year.
- The RBI order impacted the 811 customer and credit card businesses, leading to a slowdown in unsecured book growth and consequently affecting NIM.
- Challenges on low-cost deposits continued, with savers turning into investors, deploying money in high-yielding capital market products.
- The bank experienced stress in certain pockets of consumer, retail, and unsecured assets, particularly at the low-ticket levels and in segments where customers are overleveraged.
- Credit costs at the bank increased to 55 bps annualized, largely due to losses in the unsecured retail book in lower ticket segments and select geographies for the microcredit business.
- The bank's NIM decreased to 5.02% from 5.28% in the previous quarter, impacted by increased cost of funds and a slowdown in high-yield unsecured business.
Ladies and gentleman, good day and welcome to the Kotak Mahindra Bank Q1 FY25 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. I Now hand the conference over to Mr. Ashok Vaswani, Managing Director and CEO of Kotak Mahindra Bank. Thank you, and over to you, sir.
Thank you. Thank you so much, and welcome, everyone on this call to discuss the first quarter '25 results. The first quarter has been a very busy quarter for us. And today, I thought I'd cover three things with you, which I'm sure on the top of your mind as well.
I think the primary and first thing I'd like to cover is the power of being a financial services conglomerate. Obviously, as you know that in this quarter, we closed the disinvestment of the 70% stake in Kotak General Insurance with Zurich Insurance for a consideration of INR5,560 crores.
The reason I'm highlighting this is because, number one, as I've always mentioned,
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