Kotak Mahindra Bank should be able to replicate its FY18 loan-growth performance of around 20% in FY19, Uday Kotak, managing director and chief executive officer, told reporters.
Kotak Mahindra Bank should be able to replicate its FY18 loan-growth performance of around 20% in FY19, Uday Kotak, managing director and chief executive officer, told reporters. Provisioning costs will be a function of trends in the bond markets, he added. Excerpts:
You have said that provisioning in the coming quarters will be subject to the bond market trend. Will RBI easing norms for FPI investment in debt have any impact?
The way I look at bond yields is that you’ve got to look at the broader context, that is, the global situation and the domestic situation and one of the most important factors from the Indian point of view in terms of bond yields is the price of oil. The price of oil has significant implications for our current account, our fiscal situation and of course, finally, CPI (consumer price index) or inflation. So I think the Indian bond markets are certainly sensitive more than anything else to the price of oil and also how RBI moves with reference to where they go from here on the repo rate. Therefore, our view on bonds is conservative.
Have all losses related to MTM and the gratuity ceiling change been provided for?
We have cleared our overall investment provisioning. So we have not carried anything; we have just taken it on. That’s true for the gratuity-related provision as well.
How would you guide on credit costs and loan growth for the rest of the year?
Our provisioning-cost anticipation is consistent. We see it trending down, as we saw last year. The current view is that credit costs should trend down. As for loan growth, we do see a pick-up in micro. Last year, we guided for it to be more than 20% and we are fortunate to have achieved 25%. For the year 2018-19, we would guide for a 20%-plus loan growth.
In the micro space, in which pockets do you see growth happening?
We have seen construction equipment, commercial vehicles, cars, tractors as well as personal loans, consumer loans growing pretty well. Even very small businesses are reasonable. The SME segment is going through some challenges.
811 has completed a year. How has it been performing?
811 has been the mainstay for the growth in our customer base from eight million-plus to now 13 million-plus. If you recollect, in March last year, we had given a guidance that in 18 months we desire to double the customer base and add eight million incremental customers as a bank. In 12 out of the 18 months, out of the incremental eight million, we have covered nearly five million or more.