Kotak Mahindra Bank’s deposits rise 20% y-o-y despite Yes Bank debacle

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Updated: Apr 06, 2020 11:49 PM

KMB current account (CA) deposits rose 10.5% y-o-y to about Rs 43,000 crore, while savings account (SA) deposits grew 31.3% y-o-y to Rs 1.05 lakh crore as on March 31, 2020.

At the same time, KMB’s net advances grew just 6.7% y-o-y and 1.3% sequentially at a time of muted credit growth in the industryAt the same time, KMB’s net advances grew just 6.7% y-o-y and 1.3% sequentially at a time of muted credit growth in the industry

Kotak Mahindra Bank (KMB) on Monday said its total deposits grew 20% year-on-year (y-o-y) to approximately Rs 2.58 lakh crore as on March 31, 2020. The growth is significant for a quarter when the shadow of Yes Bank’s collapse led to a slide in some private banks’ deposit base. At the same time, KMB’s net advances grew just 6.7% y-o-y and 1.3% sequentially at a time of muted credit growth in the industry.

KMB current account (CA) deposits rose 10.5% y-o-y to about Rs 43,000 crore, while savings account (SA) deposits grew 31.3% y-o-y to Rs 1.05 lakh crore as on March 31, 2020. The bank said the numbers for Q4FY20 are approximate. The CASA ratio also improved to 56.2% at the end of March 2020 from 52.5% a year ago. Certificates of deposit (CDs) issued by the bank stood at Rs 4,400 crore at the end of Q4FY20, down 55% y-o-y.

KMB’s deposit growth trajectory in the quarter under review has been different from that of most other mid-sized private banks. IndusInd Bank and RBL Bank have said that their deposits were eroded to the extent of 8-11% in the quarter gone by as some state governments and other institutional depositors pulled out money or chose not to roll over deposits with them. Private banks suffered a crisis of confidence in the immediate aftermath of Yes Bank being brought under a moratorium on March 5 and its depositors being denied access to some of their money.

While KMB has outdone its peers in terms of deposit growth, its asset quality has become a matter of concern for investors. Last week, the lender told analysts over a conference call that it was concerned about its retail unsecured business. It expects higher slippages and significant problems to emerge for loan recovery if the current lockdown extends to three months.

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