3QFY2023-24 Quarterly Results
Snapshot
Concall
Presentation
Financials
https://www.bseindia.com/xml-data/corpfiling/AttachLive/2a9e804b-165d-4786-891c-0635d44cf60c.pdf
Breaking news that came at 5 pm today (24th April). Should see another round of blood letting due to this.
I have been a customer of kotak bank and kotak securities and I must say that their IT infra is weak. The service from RM (bank) is good but they alone canāt make up for such an yawning gap
PS - holding with no returns for agesā¦and cringing
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But itās mentioned that RBI had complain since 2022. So wasnāt this news was in public domain already ?
We have seen kotak bank underperforming that time. Hasnāt the news been discounted ?
Kotak can add customers offline though.
Kotak 811 has huge traction especially for onboarding corporate customers for salary accounts. Its absence will have a dire impact on deposit growth.
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as expected 12-14% dip since morningā¦now howering around 10%ā¦lack of deposit growth from new accounts will hurt but more than anything else, inspite of knowing pretty well that their IT infra is weak, they never botheredā¦have a look at any of their apps, web sitesā¦zero thought (in fact, negative thought has gone into itā¦the whole thought process is to ensure that no one can navigate easily and make a mess seems to be the motto)ā¦ease of use, scale up, security, aesthetics, listening to the customer, all sub zero to the coreā¦if I were at the top, I will sack the entire IT team
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After some of these events of Information Technology issues pertaining to HDFC Bank and Kotak Bank, it seems that, ICICI Bank Website is still the leader in comparison as far as Ease of Use, Navigation, Functionality is concerned. Having used websites of HDFC Bank and ICICI Bank and Many other banks, probably SBI and ICICI Banks seems to be doing better than other banks. (I do not use any Mobile Banking App).
What could be the reason? Is it that, few banks are not investing properly to upgrade their IT infrastructure OR Is there any thing beyond what we can see as a customer?
Overall, it does not augur well for so called Digital Nation with largest population working in IT industry!!!
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I dont think ICICI is really that better (I am a bank customer) the mobile app (Android) is very glitchy and we had a major issue reported today
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buyed kotak bank further with a view of short term impact of RBI Action (upto I year). For long term, i think story is intact much better at these prices. similar thing happens with HDFC at 2020.Planned to buy further, if further price detriorates.
Let see how my conviction holds with time.
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This is much more severe thn the wrap on the HDFC Bank knuckles. Catching a falling knife is always fraught.
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Probably the best take I found regarding this situation well backed up by numbers
https://twitter.com/iKrishnaAppala/status/1783467947152818484?t=oF0Nwj8KUW1G4vcbYUoNrw
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Bank may overcome this in the long run, but, my major concern is 811 is headed by Jay Kotak.
How can he be so lax? May be honest mistake, and, part of his learning curve. May be.
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One way to analyse banking apps is via playstore
As per google playstore banks ratings are:
ICICI 4.5
HDFC 3.8
Kotal 4.1
SBI 4.0
So and soā¦
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I wrote a piece on Kotak Mahindra Bank - RBI Delivers a Bouncer, Kotak Ducks: Can Kotak Mahindra Bank make a Strong Comeback | by Chaitanya Khanna | Apr, 2024 | Medium
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This article looks practical with very balannced approach.
After few years, when credit cycle turns around and NPA(s) may start rising, then conservative banks like Kotak Bank can prove their potential. During growth phases, banks can become aggressive as we have seen during past few decades, and that leads to high NPA(s) at later date. Kotak Bank should make their IT infrastructure robust and more secured, and over a period can solve this current weakness.
After few quarters if IT systems become stable, there is a possibility to get back to their original high NIM(s), and Deposit Growth which can drive credit growth. Till that time, Investors need to keep faith in the capability of an experienced management.
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RBIās press release mentions that the action was taken due to lack of backend systems in place. It also specifically mentions outages i.e. lack of switching to backup as the main reason for action.
Their customer interface on their apps might be good but RBIās rap is for their lack of necessary systems and infrastructure. Banks do prioritize quarterly profits over adequate infrastructure
Disc: Hold positions
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Hi,
The irony is that as per RBI they have been highlighting the IT tech issue from the year 2022 onwards.so by the time RBI banned them in April 2024 it is more than 2 years. so it is quite shocking to see Bank not adhering to RBI for almost 2 years!! And it was Mr. Uday Kotak who was at the whelm till 2023 end. So it is evident that he basically ignored the RBI concernsā¦ Moreover his son is heading the digital 811 part, so the ignorance of not following RBIās diktat in an era where digital expansion is the way forward is actually failure of the management. And when you compare to other reputed private sector banks like HDFC they are in a physical branch expansion spree whereas Kotak has become lethargic in physical branch expansion mode and relied solely on digital mode.
Just within 7 days of the crisis, joint MD resigns from the post (who was elevated just 2 months back) after a stint of almost 29 years in a bank. Mr. KVS Manian is a veteran for the bank, why would he resign and leave his child in this difficult times, instead of helping the newly joined Boss? Seems like a leadership crisis also on the way!!
Moreover when I see Mr. Uday Kotak now a days he seems to be preaching whole world what to do and what not to do. But the crisis of leadership and technology fiasco at the kotak bank seems to have happened under his nose. lets see how this pans outā¦
Disc: Invested at higher levels, so opinion might be biased.
Thanks,
Deb
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Mr. KVS Manian has been bypassed for the CEO role. he was contention until the final hour , when all of a sudden an outsider took the job.
āwhy would he resign and leave his child in this difficult timesā
looks far fetched to call Kotak as KVS Manianās child, would suit to Uday alone. My guess is he would have few CEO roles calling .(Gossip is that federal bank is quite keen)
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This is not just happening in Banking sector but across many sectors. Managements for some reason are ignoring warnings by RBI, Regulators, Food and Medicine Regulators, Educational regulators assuming that, nothing will happen even if they keep ignoring such warnings.
In medical sectors, some companies have published ads in last 3-4 years and irrespective of concerns raised, kept on publishing mis-leading ads.
I think Corporate Governance and Ethics should be taken seriously by all sectors so that the old mistakes are not repeated in future.
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Such tech glitches are not new, happens in every industry. ICICI Bank had more serious tech issue lately but why that bad news hasnāt gone viral like the Kotakās?
I strongly feel such events are being used to create negative sentiment in the minds of retailers. Even the recent sharp correction will make us feel that at what price we have bought the stock wasnāt good at all. The day it reaches back to our avg buying level, many retailers end up selling due to all such negative fabricated narratives. I think thatās all these market manipulators or operators want.
Agar muje (read DIIs/FIIs/Operators) koi stock 1800/1900 pe buy karna hai bcoz I know itās worth 2500+ but retailers apni position chhod nahi rahe hai to kya kare? Create panic by making a mountain out of a molehill.
If Kotak bank has done something so wrong then why DIIs are still increasing their stake every single quarter? Even if you observe delivery percentage on NSE for Kotak Bank it is almost 60%+ every single trading day. Whoād be buying these much in bulk? Not many retailers I think. Theyāre frustrated bcoz of notional losses shown in their demat account.
Take it easy friends. This too shall pass! Focus on allocation to each stock such that they donāt move you too much.
PS - I too have highest allocation to HDFC and Kotak Bank in my pf. Yes, it pinches when stock falls much beyond we anticipate but that doesnāt make such businesses bad. As of now I am just holding these 2 stocks calmly, wonāt do ārevenge buyā as my allocation level beyond current point will not let me sleep peacefully. 
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