State Bank of India – No Let Up On Credit

SEBI Exposes Kotak Mahindra Mutual Fund’s Policy of Investing Blindly

LIC Housing Finance – No NCOs Whatsoever?

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Unnecessary Credit Leverage: Kotak Mahindra Bank (KMB.IN) [KMB] reported FY 2Q22 results of INR 20.3 bn, improving INR 3.9 bn (23.8%) linked quarter. Results were primarily driven by an INR 2.8 bn (39.8%) decline in loss provisions despite credit weakness; and*Credit Delta Less Intense, But Reserves Weak: By our calculation, we find that both net new stressed loans  amounted to an accelerating INR 5.5 bn at FY 2Q22 and aggregate an annualized growth rate of 26.1% - improving throughout the year. Given the weaker credit metrics and current weak reserve cover, we find that reserves at FY 2Q22 fall short by INR 61 bn - about three quarters of stated PBT.

*Unnecessary Credit Leverage: Kotak Mahindra Bank (KMB.IN) [KMB] reported FY 2Q22 results of INR 20.3 bn, improving INR 3.9 bn (23.8%) linked quarter. Results were primarily driven by an INR 2.8 bn (39.8%) decline in loss provisions despite credit weakness; and*Credit Delta Less Intense, But Reserves Weak: By our calculation, we find that both net new stressed loans  amounted to an accelerating INR 5.5 bn at FY 2Q22 and aggregate an annualized growth rate of 26.1% - improving throughout the year. Given the weaker credit metrics and current weak reserve cover, we find that reserves at FY 2Q22 fall short by INR 61 bn - about three quarters of stated PBT. 

Kotak Mahindra Bank – Watch Your Costs Too