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Kotak Bank has commanded higher multiples than other Indian banks & stands out coz of high quality earnings & good disclosure. Its quarterly earnings call transcript is a treasure trove for macro & sector specific insights from Mr. Uday Kotak. Excerpts of Dec 20 qtr in 
below
below
Base Case for Indian economy: Normalization through 2021, especially with the vaccine being effective, and that leading to some pressures on the demand and supply side, putting some inflationary pressures leading to normalization of interest rates (o/n ~4%. 10y ~ 6.5%).
Base Case for Indian economy: Normalization through 2021, especially with the vaccine being effective, and that leading to some pressures on the demand and supply side, putting some inflationary pressures leading to normalization of interest rates (o/n ~4%. 10y ~ 6.5%).
Future of Banking: Benchmark is those who can come into the ecosystem play (read bigtech/fintech). Parts of old culture need to continue. Don't focus too much on cross-sell numbers. Branches required but lower density coz of digital. Internal mantra: Execution, execution!
On ECLGS: Win win for all. Govt gave guarantee for 20% incremental lending to MSME. Increased chances of MSME survival & cut default risk on bank loans to MSME. Kotak identified all who could take this loan & reached out. Many took this loan as insurance & didn't need money.
On CASA: On savings account, Kotak pays 4% upto Rs.1 cr & 3.5% for > Rs. 1 cr balances. Since liquid funds @3% only, money came from wholesale market into SA. Easy to show high growth in deposits (by paying high SA rates), but not appropriate for the underlying operations.
Corporate sector came out better from Covid (vs commercial & retail consumer). Corporates had access to equity, got RBI funding & liquidity benefit and were able to cut a lot of costs. So, Kotak is growing loans to corporate rapidly(~28% annualized).
