Kotak Mahindra Bank Shares Fall 4% As Slow Sequential Growth In Loans And Deposits Bothers Investors

Mumbai, July 6: Kotak Mahindra Bank share price fell 4% on Monday even after the private sector lender reported double-digit year on year growth in loans and deposits for the June quarter. Investors appeared disappointed by the bank’s relatively slower deposit growth and sequential moderation in deposits and loans.

The stock emerged as one of the top laggards on the Nifty Bank index, contrasting with gains in peers such as HDFC Bank and Axis Bank, whose quarterly business updates were received more positively by the market. As of writing the stock was down 3.6% at Rs 382.

Loan book crosses ₹5 lakh crore

Kotak Mahindra Bank reported net advances of ₹5.12 lakh crore as of June 30, registering a 15% year-on-year increase from ₹4.45 lakh crore a year earlier. The growth indicates continued traction in lending across retail, commercial and corporate segments despite a challenging environment. Sequentially, net advances rose over 3%.

Deposits continue to grow

The bank’s total deposits rose 12% year-on-year to ₹5.73 lakh crore. Sequentially, however, the growth in deposits was 0.1%.

Stock is down over 3% over a week versus Nifty 50 rising 2%. Source: NSE

Investors remained cautious as deposit growth lagged loan growth, a trend that has been under scrutiny across the banking sector amid intense competition for retail deposits.

In a significant strategic move, Kotak Mahindra Bank last week agreed to acquire Deutsche Bank India’s retail banking, private banking and wealth management businesses for ₹282 crore. The transaction ranks among the largest portfolio acquisitions seen in India’s financial services sector in recent years.

Focus shifts to June-quarter earnings

The provisional business update provides operational metrics ahead of Kotak Mahindra Bank’s detailed June-quarter financial results, which are expected later this month.

Investors will closely track the lender’s net interest margin, asset quality, provisioning and management commentary on deposit mobilisation and credit growth. Analysts will also watch for the Reserve Bank of India’s policy actions.

While the bank delivered healthy double-digit growth in advances and deposits, Monday’s market reaction suggested investors were looking for stronger deposit traction and better sequential growth.

Source: https://www.nseindia.com/get-quote/equity/KOTAKBANK/Kotak-Mahindra-Bank-Limited