Kotak Bank to focus on stabilisation

Kotak Mahindra Bank will concentrate on stabilising its operations for the time being, and will scout for inorganic growth options only after one year.

"It is too early to talk about mergers and acquisitions. It is only 10 months since we started our banking operations," Dipak Gupta, executive director of the bank, told Business Standard.

As per the growth roadmap charted out by the bank, it will have a network of 50 odd branches in place over a period of three years.

The bank has earmarked a Rs 100 crore kitty for establishing information technology, branch infrastructure and people, Gupta said.

Kotak Bank had opened four new branches in the third quarter (October-December) of fiscal year 2004 and two more branches last month.

It now has 14 full-fledged branches across 10 cities in India and aims to take the figure to 18 by the end of March.

The bank will continue to focus on the "mass affluent consumers" so that it can derive more fee-based income. The mass affluent households are those with an income of 4.5 lakh and above.

Retail lending will continue to be the main growth driver. Of the total advances, which currently stands at Rs 2,000 crore, retail "" commercial vehicles, auto loans, personal loans, home loans "" accounts for nearly 75 per cent. The balance is accounted for by corporate banking.

Small and medium enterprise lending (SME) is an emerging growth area for lending operations, Gupta said. He also mentioned that the bank sees a big opportunity in the booming IPO segment.

The bank has initiated steps to tap the home loan market. During the last three months, the bank has disbursed approximately Rs 50 crore to this segment.