Kotak Mahindra Bank to focus on corporate loans

Kotak Mahindra Bank is aiming to expand its corporate loan book, snatching business from state-run lenders that are battling to conquer the bad assets problem. The Bank is aiming to increase by a third, the share of corporate loans in its consolidated loan book to 40 per cent in the next three years.

Kotak Mahindra Bank has successfully acquired at least 500 large and medium-sized new clients consistently each year, for the last three years, adding about 700 new companies from conglomerates such as the Tata or Aditya Birla Groups.

Kotak Mahindra Bank’s client additions have helped to lower the risk as well as to increase returns. The bank’s business used to earn RoE of 12 per cent to 13 per cent. During current year, it has been targeted at 21 per cent, by maximising non-capital based income such as fees, transaction banking and trade.

The stock price of Kotak Mahindra Bank increased 0.86 per cent in early trade, and is trading at Rs 866.4 on an intraday basis.