Kotak Bank flags stress in auto, MSME loans; net dip 7% as provisions soar 109%

New Indian Express

6 days ago

MUMBAI: Kotak Mahindra Bank, which has reported a 7% decline in net income for the June quarter at Rs 3,282 crore weighed down by a more than doubling of provisions for bad loans, said it will be cautious on retail commercial vehicles and SME lending, while it resumes microfinance lending on a selectively following a period of high stress.
Acknowledging the growing stress in the retail CV portfolio, which comes after a long red period in its MFI portfolio, the outgoing deputy managing director, Shanti Ekambaram, told reporters Saturday that CV sector closely tied to logistics and infrastructure, is now reflecting the impact of a broader economic slowdown.
'There has been some stress on the retail CV segment and we are monitoring it very closely though this has been a good business with healthy return on equity. Though we continue to disburse, we already had tightened our stance last quarter, ' she added.
Ekambaram attributed the rising delinquencies in retail commercial loans book to the macroeconomic backdrop. 'It's the slowing macro now playing out in the micro,' she said, adding the bank would continue to dynamically manage exposure.