Markets
Kotak Bank expects margin pressure from dollar deposits to ease gradually
Kotak Mahindra Bank expects net interest margins to remain near the September-quarter level as the cost of foreign-currency deposits offsets benefits from repricing repo-linked loans and deploying surplus funds. The bank’s NIM fell to 4.31% in the quarter, while profit rose 29% year on year and bad-loan ratios improved. Management expects fuller loan repricing in the fourth quarter, but said FCNR-related pressure will persist and flagged rainfall and regional economic conditions as risks.
Editorial summary · Publisher article
What matters
- Second-quarter NIM declined from 4.53% to 4.31%.
- FCNR(B) deposits accounted for roughly 15 basis points of the sequential margin decline.
- About 60% of advances are repo-linked, enabling repricing as rates move.
- Deposits and advances grew strongly, though the CASA ratio fell to 38.2%.
Funding and asset deployment
Kotak raised about ₹55,344 crore through FCNR(B) deposits and plans to deploy remaining liquidity over several quarters, while loan repricing should contribute more fully in the fourth quarter.
Context & caveats
- The margin outlook is management’s forecast and remains exposed to funding costs, loan repricing timing and regional credit conditions.
Why this made the edition
Provides detailed earnings-call reporting, balance-sheet figures and management explanations for Kotak Mahindra Bank’s margin outlook, with relevant credit-quality and funding context.
Source material