Kotak Mahindra Bank Explained

Kotak Mahindra Bank
Type:Public
Industry:Financial services
Founders:Uday Kotak
Revenue: [1]
Revenue Year:2024
Income Year:2024
Net Income Year:2024
Assets: [2]
Aum: (2023)[3]
Assets Year:2024
Equity Year:2024
Num Employees:116,000+ (March 2024)[4]
Location:Mumbai, Maharashtra, India

Kotak Mahindra Bank Limited is an Indian banking and financial services company headquartered in Mumbai. It offers banking products and financial services for corporate and retail customers in the areas of personal finance, investment banking, life insurance, and wealth management.[5] As of December 2023, the bank has 1,869 branches and 3,239 ATMs, including branches in GIFT City and DIFC (Dubai).[6]

History

1985–2002: Kotak Mahindra Finance

In 1985, Uday Kotak founded Kotak Mahindra Financial services Limited as financial services company with a loan of 30 lakh from family and friends.[7] In 1986, Anand Mahindra and his father Harish Mahindra invested 1 lakh in the company which was subsequently renamed Kotak Mahindra Finance.[8] The company was initially engaged in bill discounting, along with lease and hire purchase activities.[9]

In the early 1990s, the company started offering car financing and investment banking services and expanded its operations overseas. In 1996, car financing company Kotak Mahindra Primus was incorporated as a 60:40 joint venture between Kotak Mahindra Finance and Ford Credit International.[10] In the same year, Kotak Mahindra Finance hived off its investment banking division into a new company, Kotak Mahindra Capital, started in partnership with Goldman Sachs.[11]

In 1998, Kotak Mahindra Finance started its mutual fund arm called Kotak Mahindra AMC.[12] In 2001, OM Kotak Mahindra Life Insurance was established as a 74:26 joint venture between Kotak Mahindra Finance and Old Mutual.[13]

2003–present: Kotak Mahindra Bank

In February 2003, Kotak Mahindra Finance received a banking licence from the Reserve Bank of India, becoming India's first non-banking finance company to be converted into a bank. Kotak Mahindra Finance was then renamed Kotak Mahindra Bank.[14] At the time, Uday Kotak had a 56% stake in the company while Anand Mahindra held a 5% stake.[15]

In 2005, Kotak Mahindra Bank acquired Ford Credit's 40% stake in Kotak Mahindra Primus, making it a wholly-owned subsidiary of the group.[16] Kotak Mahindra Primus was subsequently renamed as Kotak Mahindra Prime.[17] In 2006, Kotak Mahindra Bank bought out Goldman Sachs' 25% stake in Kotak Mahindra Capital for and 25% in Kotak Securities for, turning both companies into its wholly-owned subsidiaries.[18]

In 2014, Kotak Mahindra Bank acquired a 15% stake in Multi Commodity Exchange (MCX) from Financial Technologies Group for to become the company's largest shareholder.[19]

In 2014, Kotak Mahindra Bank announced the acquisition of ING Vysya Bank in a deal valued at . With the merger completed in 2015, Kotak Mahindra Bank had almost 40,000 employees, and the number of branches reached 1,261.[20] After the merger, ING Group, which controlled ING Vysya Bank, obtained a 6.5% stake in Kotak Mahindra Bank.[21]

In 2015, Kotak Mahindra General Insurance, a wholly-owned subsidiary of Kotak Mahindra Bank, started operations after receiving IRDAI's approval.[22] In 2016, Bharti Airtel and Kotak Mahindra Bank started an 80:20 joint venture called Airtel Payments Bank.[23]

In 2016, Kotak Mahindra Bank acquired BSS Microfinance for .[24]

In March 2017, Kotak Mahindra Bank launched an online savings account called Kotak 811, named after the date Prime Minister Narendra Modi had announced demonetisation in the previous year (8 November), which according to Uday Kotak was "the day that changed India."[25] [26] Kotak 811 helped the bank double its number of customers by September 2018.[27]

In April 2017, Kotak Mahindra Bank acquired Old Mutual's 26% stake in Kotak Mahindra Old Mutual Life Insurance for, making the life insurance company its wholly-owned subsidiary.[28]

In 2021, Kotak Mahindra Bank sold its 8.57% stake in Airtel Payments Bank to Bharti Enterprises for .[29] In the same year, Kotak Mahindra Group acquired the vehicle financing portfolio of Volkswagen Finance India[30] and passenger vehicle financing portfolio of Ford Credit India.[31] In 2022, it acquired the agriculture and healthcare equipment financing portfolio of DLL India.[32]

In 2023, Kotak Mahindra Bank acquired microfinancier Sonata Finance for .[33]

In February 2024, Zurich Insurance Group announced its acquisition of a 70% stake in Kotak Mahindra General Insurance for .[34]

Subsidiaries and associates

Major subsidiaries of the Bank include [35]

Recognition

In a study by Brand Finance Banking 500 published in February 2014 by Banker magazine, Kotak Mahindra Bank was ranked 245th among the world's top 500 banks with a brand valuation of around and brand rating of AA+.[36] [37]

Philanthropy

In 2020, Kotak pledged to donate to the PM CARES Fund to fight against the COVID-19 pandemic in India.[38]

Controversies

In April 2024, the Reserve Bank of India barred Kotak Mahindra Bank from onboarding new customers via mobile banking, online channels, and issuing new credit cards.[39] Existing customers were not affected. The RBI cited deficiencies in the bank's IT systems as the reason for this action.[40]

See also

Further reading

Notes and References

  1. Web site: Kotak Mahindra Bank Consolidated Profit & Loss account, Kotak Mahindra Bank Financial Statement & Accounts. 4 May 2024. bseindia.com. en.
  2. Web site: Kotak Mahindra Bank Consolidated Balance Sheet, Kotak Mahindra Bank Financial Statement & Accounts. 4 May 2024. bseindia.com. en.
  3. Web site: Assets Under Management. www.kotak.com. 31 March 2023. in PDF on page 17.
  4. https://www.bseindia.com/xml-data/corpfiling/AttachHis/a1c5625c-a57a-47aa-b789-57b51ba4bc1a.pdf "Annual Report 2024"
  5. News: List of private banks by market capitalization . moneycontrol.com. 23 April 2019.
  6. Web site: Press Release Q3FY24 .
  7. Web site: 18 December 2020 . How Uday Kotak, world's richest banker, made $16 bn after a brush with death . mint . en.
  8. News: 1 Lakh Investment Turned Into 1,400 Crores In 32 Years. This Is For Real . NDTV.com . 15 June 2022.
  9. News: Kotak Mahindra Bank Ltd. . Business Standard India . 15 June 2022.
  10. News: Philip . Lijee . Ganguli . Bodhisatva . Kotak Mahindra to buy Ford's stake in Primus . The Economic Times . 15 June 2022.
  11. News: Retail brokerage's the key unit: Kotak . The Economic Times . 22 October 2022.
  12. News: Kotak Mahindra Asset Management Company Limited . CARE Ratings . 22 October 2022.
  13. News: Kotak Mahindra, Old Mutual get nod for life insurance JV . www.rediff.com . 15 June 2022.
  14. News: RBI gives Kotak Mahindra banking licence . en . The Times of India . 15 June 2022.
  15. News: Kotak Mahindra Finance in limelight . www.rediff.com . 15 June 2022.
  16. News: Kotak Mahindra, Ford to end JV . 15 June 2022 . The Economic Times.
  17. News: Kotak Mahindra Prime Limited . 15 June 2022 . ICRA.
  18. News: Kotak, Goldman Sachs part ways - Global financial powerhouse plans $1-bn investment in India . 22 October 2022 . The Telegraph.
  19. News: Kotak to buy 15% stake in MCX for Rs 459 cr . 8 November 2022 . Business Standard . 21 July 2014.
  20. News: Kotak Bank acquires ING Vysya for INR 15,000 crore. 15 April 2015. The Hindu. 20 November 2014. Mumbai.
  21. News: ING Vysya staff seek job surety from Kotak. Business Standard India. BusinessStandard. 15 April 2015. 6 December 2014.
  22. News: Kotak Mahindra Gen Insurance gets IRDAI nod to commence biz . 22 October 2022 . Moneycontrol . en.
  23. News: Airtel Payments Bank launched, with vow to shake up old banking system . 1 May 2021 . mint . 12 January 2017 . en.
  24. News: S . Rajalakshmi . Kotak Bank to acquire 99.5% stake in BSS Microfinance . 8 November 2022 . The Hindu Business Line . 30 September 2016 . en.
  25. News: Balakrishnan . Ravi . Life after 8/11: Banks believe the customers will return, once they're done flirting with e-wallets . 7 November 2022 . The Economic Times . 24 May 2017.
  26. News: Kotak Bank Launches 811 'Zero Balance, Zero Charge' Account. Details Here . 7 November 2022 . NDTV.
  27. News: How Kotak Mahindra Bank Scripted Marketing History . 7 November 2022 . Forbes India . en.
  28. News: Sinha . Shilpy . Kotak to buy out Old Mutual in insurance JV . 15 June 2022 . The Economic Times.
  29. News: Kotak Mahindra Bank sells 20 crore shares in Airtel Payments Bank for Rs 295 crore . 22 October 2022 . Economic Times . en.
  30. News: Kotak Mahindra acquires vehicle financing portfolio of Volkswagen Finance . 8 November 2022 . Mint . 16 September 2021 . en.
  31. News: Kotak Prime acquires passenger vehicle financing portfolio of Ford Credit . 8 November 2022 . Mint . 22 December 2021 . en.
  32. News: Mishra . Lalatendu . Kotak Mahindra Bank acquires agri, healthcare portfolio of DLL India . 17 February 2023 . The Hindu . 8 July 2022 . en-IN.
  33. News: Kotak Mahindra Bank acquires microlender Sonata for Rs 537 cr in all cash deal - ET BFSI . 17 February 2023 . Economic Times . en.
  34. News: Zurich Insurance to buy 70% stake in Kotak arm upfront in amended deal . 3 May 2024 . The Economic Times . 7 March 2024.
  35. Web site: Investor Presentation.
  36. Web site: Top banks on a slide; smaller peers do better: Brand Finance study – The Smart Investor. 3 September 2015.
  37. Web site: The Banker – The Banker. The Banker. 3 September 2015.
  38. Web site: 29 March 2020. Kotak Mahindra Bank, Uday Kotak jointly pledge ₹50 to PM-CARES Fund. 2 July 2020. Livemint. en.
  39. Web site: Vyas . Hitesh . 2024-04-24 . RBI bars Kotak Mahindra Bank from onboarding new customers via online, mobile banking channels . 2024-05-15 . The Indian Express . en.
  40. News: Ghosh . Saptaparno . 2024-05-07 . The Kotak Mahindra Bank controversy Explained . 2024-05-15 . The Hindu . en-IN . 0971-751X.