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Informist, Saturday, Jan. 24, 2026

 

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--Kotak Bank: See traction in credit card business in coming quarters 
--CONTEXT:Comments by Kotak Mahindra Bank's mgmt at post-earnings press meet 
--Kotak Bank: To accelerate issuance, spend on credit card side 
--Kotak Bank: Expect moderate increase in margin 
--Kotak Bank: Credit losses coming down sharply in microfinance segment 
--Kotak Bank: Credit in microfinance segment will start growing hereon 
--Kotak Bank: Credit card business muted across industry in Q3 

 

MUMBAI/NEW DELHI – Kotak Mahindra Bank's management expects the credit card business segment to grow in the coming quarters, it said in a post-earnings media call Saturday. "From here onwards, we will be accelerating both the issuance and spend on the cards with various promotions and things like that. So, credit cards should be something that we start seeing traction in the next couple of quarters," the management said.

 

The bank's credit card business was at INR 123.22 billion in the December quarter, down 13% on year and 1% on quarter. As on Dec. 31, 2024, the bank's credit card segment business segment was at INR 141.16 billion. The bank's credit cost fell to 0.63% in the December quarter from 0.68% a year ago.   

 

The management added that the credit card business was muted across the industry during the December quarter. "But I feel really good about where we are with the credit card business and I'm hoping that we can start demonstrating growth going forward," it said. 

 

The bank's net profit for the December quarter was up over 4% on year at INR 34.46 billion, while the total income was INR 167.41 billion, also up 4% on year. The net profit rose despite provisions for the new labour code.

 

The private sector bank's cost-to-income ratio was 48.3% in the December quarter, up from 47.2% a year ago due to costs related to the new labour code. However, the management said the cost-to-income ratio was down about a percent if the labour code related cost was excluded. 

 

Commenting on the bank's net interest margin, the management said the Reserve Bank of India's 25-basis-point rate cut in December would effect margins in the current quarter and the first quarter of the next financial year. However, the net interest margin in the March quarter will tend to be on the higher side due to 28 days in February, and the 100 bps of cash reserve ratio cut by the RBI. 

 

"...we expect a moderate increase in the margin but again, as I said, the benefit of the number of days is reparation for Q4, so you will have to really see in Q1 where does it settle and of course this is on the assumption that there are no further repo rate cuts in February going forward," the management said.  

 

Although growth in the commercial bank space slowed in the previous quarters, the management is confident about a comeback in the space and about getting into the regular growth trajectory into the final quarter of 2025-26 (Apr-Mar) and essentially into FY27. "The mix of businesses in the commercial bank are such that there are certain businesses obviously which we had to slow down, there are certain businesses that we are coming back to, and then there are certain businesses that we are firing," the management said. 

 

It affirmed that credit losses in the microfinance segment were falling sharply. "We've actually now got credit insurance for the MFI portfolio. So, we put everything in place to be able to grow this book. This quarter, we pretty much dispersed as much as we got repayments and therefore the (credit) growth in the book was not much. But you will see sequentially the credit, the MFI book growing from here and onwards," the management said. 

 

It said it is comfortable with the credit-to-deposit ratio at 85-88%. The private bank's CD ratio for the December quarter was 88.6%, up from 87.4% a year ago and 87.5% a quarter ago. 

 

The board of Kotak Mahindra Bank Saturday also approved a proposal to raise INR 150 billion through non-convertible debentures on a private placement basis in FY27. Commenting on the proposal, the management said this was an "enabling resolution to raise bonds in case funding is required". "We every year take the resolution because we do not want to have a situation where we have a requirement and opportunities available and we don't have a resolution," the management said.  End

 

Reported by J. Navya Sruthi and Sagar Sen

Edited by Avishek Dutta

 

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