Kotak Mahindra Bank clarifies on report of Berkshire investment

The bank has clarified that it is unaware of any plans by Berkshire Hathaway to buy stake in the bank.

Dec 07, 2018 07:12 IST India Infoline News Service

Kotak Mahindra Bank
Shares of Kotak Mahindra Bank (KMB) were trading higher on both the indices during the afternoon session. The bank has clarified that it is unaware of any plans by Berkshire Hathaway to buy stake in the bank.

The Exchange had also sought clarification from Kotak Mahindra Bank with reference to the news that appeared on CNBC-TV18.

“We confirm that we have nothing to report to the exchanges on the said item. Kotak Mahindra Bank is unaware of any plans by Berkshire Hathway buying stake in the bank as stated in the story,” the bank said in a BSE filing.

Kotak Mahindra Bank Ltd is currently trading at Rs1,233.55 up by Rs52.05 or 4.41% from its previous closing of Rs1,181.50 on the BSE. The scrip opened at Rs1,183 and has touched a high and low of Rs1,345.35 and Rs1,177.30 respectively.

KMB is expected to deliver 27% earnings CAGR over FY18-20E led by a well-capitalized balance sheet, granular book, controlled opex through digitalization, and superior asset quality.

Further, the bank is expected to register strong loan growth of 20% CAGR over FY18-20E largely due to a robust increase in corporate and retail segment lending. It also benefits from synergies arising from the acquisition of ING Vysya Bank. We see a CAGR of 19% in NII over FY18-20E. Higher savings deposit growth is expected to further aid the CASA ratio (~44% current), helping the NIM (best in the industry) to be maintained in the range of 4.4-4.6% over FY18-20E. The increasing share of high yielding retail loans and recoveries from corporate segment loans bodes well for its asset quality improvement.

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