After Uday Kotak's Exit,
Kotak Bank has seen regulatory action from the RBI and top management exit🤯🤯
What is happening at Kotak Bank?
The Bank just reported its numbers
A thread🧵on the results of Kotak Mahindra Bank and what lies ahead?
Lets go👇
Loan Growth:-
🏦Loan growth at 20%
🏦Cosumer loans grew at 20%
🏦Corporate loans grew at 20%
🏦Unsecured loans are growing very fast for Kotak
Deposit Growth:-
🏦Depsoit growth at 13%
🏦Term deposits grow at 35%
🏦Cost of funds at 4.13%
Deposit growth is slower for Kotak Bank
Asset Quality:-
🏦Gross NPAs fall to 1.39%
🏦Slippages at 1305cr
🏦PCR at 75.9%
Asset quality remains robust for the bank
Capital Adequacy:-
The Bank is adequately capitalized
TIER-1 Ratio at 19.6%.
In fact, the bank also declared a dividend
Action By the RBI:-
RBI IT department inspected CBS and online banking systems and found frequent outages.
As a result,
Kotak Mahindra Bank will now cease to onboard customers from online and mobile banks
RBI also bans new onboarding of credit cards .
Update from the Bank on the action taken:-
The Bank is taking steps for further steps to strengthen the IT systems
Impact Of RBI action on Kotak Mahindra Bank?
Kotak is anyway not aggressive on Credit cards.
Total loans outstanding on credit cards is just 3-4% of the total book.
The slowdown in loans from 811 will be a real hit for the bank
80-99% of new PL, credit card, and business lending (in volume terms) was done digitally.
Net not a very big hit for the bank
However, the reputation damage to Kotak is big.
Kotak prided itself on being world-class bank on compliance.
Given these deficiencies,
The premium will wane away for Kotak.
At a time when the bank is undergoing a transition.
This compliance embargo from RBI will be a real challenge for the new management.
Exit of Top Management?
After Uday Kotak
KVS Manian exited from the bank(mostly going to head federal bank)
Uday Kotak's entire team is now coming off
It remains to be seen how the new management leads the bank from these tough times
Valuation:-
Kotak now trades at 2.29x P/B
Which is now lowest in its history.
But the Uday Kotak premium is now going away for the bank
Conclusion:-
Kotak's results are nothing to complain about.
Growth is good
Asset quality is stable
They have strong capital and a superb franchise.
However the stability of top management and the response to RBI's embargo remain a jey monitorable for the bank
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🚨Specialized Investment Fund(SIF)-Mutual funds with short positions!
SEBI has notified a new category of SIF
This will be a new asset class b/w PMS and Mutual funds,
What are SIFs?
Who can create SIF?
A thread🧵on SIFs and should u invest in them?👇
What are Mutual funds?
A mutual fund is an investment fund that pools money from many investors to purchase securities.
Mutual funds in India are not allowed to take short positions.
They are mostly long-only products,
So SEBI created a new asset class
What is Specialised Investment Fund(SIF)?
The Specialized Investment Fund (SIF) is a new category of investment product introduced by SEBI to bridge the gap between Mutual Funds (MFs) and Portfolio Management Services (PMS).
SIFs aim to provide a middle ground, offering portfolio flexibility while ensuring regulatory compliance and investor protection.
As L&T invested in E2E networks,
The Stock zoomed up and all retail investors got sucked in,
After the company reported its numbers,
The stock is locked in multiple down circuits,
What is happening at E2E networks?
A thread🧵on the business of E2E networks and the way forward?👇
As the world moves towards AI
Generative AI market opportunity is scaling up really very fast
A GPU, or graphics processing unit, is an electronic circuit that's designed to process graphics-related tasks quickly and efficiently:
What it does?
GPUs are responsible for rendering images, videos, and animations on your screen. They're also used for other compute-intensive tasks, such as machine learning, video editing, and scientific computations
How it works
GPUs are designed for parallel processing, which means they can perform the same operation on multiple data values at the same time. This makes them more efficient than central processing units (CPUs), which are designed to handle a wider variety of tasks.
🚨IDFC First Bank-Is the Next HDFC Bank unraveling?
IDFC Bank is one of the most popular Twitter stock
Driven by a sharp rise in microfinance NPA provisions
The bank reported a 53% fall in Net Profit
What is going on at IDFC first bank?
A thread🧵on the results and how the bank is positioned going forward
Lets go👇
Loan growth:-
🏦The Bank reported a loan growth of 21%.
🏦Predominantly a retail asset bank.
🏦Unsecured loans remained 60% of the book.
🏦Credit cards book has started to grow sharply
🏦Home loans are now growing well
Deposit Growth:-
Deposit growth remains robust at 32%.
CASA ratio has now come down to 48.9%
Ramp up of the deposit franchise makes IDFC stronger