q3fy08 investor presentationir.kotak.com/downloads/q3fy08_investor_presentation_1.pdf · 7 ®...

1

®

March 2008

2

® Table of Contents

∞ Overview of Kotak Group Section I

∞ Overview of Kotak Group Businesses Section II

∞ Financial Summary Section III

3

®

Section I :Overview of Kotak GroupSection I :Overview of Kotak Group

® Journey so far…

TradeFinance

1986 1990 2003200119981996199519921991

Ford Credit JVs

Mutual Fund

StockBroking

GoldmanSachs JVs

IPO

InvestmentBanking

AutoFinance

Life InsuranceOld Mutual JV

Dubai London

New York

BANK

Restructuring Ford& Goldman JVs

2006

Singapore

2007

Journey so far..

5

®

*100% 100% *74%

Mutual fund

Life insurance

*100%

• Stock broking

• eBroking

• Distribution

• IPOs• Private equity• Project advisory• M&A

Kotak Mahindra

Capital Company

Kotak Mahindra

Prime

Kotak Mahindra Old Mutual Life Insurance

KotakSecurities

• Car Finance & other lending

Kotak Mahindra Asset

Management Company

Kotak Mahindra

Investments

Kotak Mahindra

Trustee Company

100% 100%

26% held by Old Mutual

Kotak Investment

Advisors Limited

Kotak Mahindra

(International)

Kotak Mahindra (UK)

Global Investments

Opportunities Fund

*Includes direct and indirect holdings

• Investment

• Lending

*100%

Corporate BankingTreasury

Retail Branch Banking

Wealth Management

Retail Lending

Kotak Mahindra

Trusteeship Services

Kotak Forex Brokerage

Kotak Mahindra

Inc.

*100% *100%*100% *100% 100%*100% 100%

Trustee Company

Trustee Company Interbank forex broking

Group Structure

• Advisory Services

• Investment Management

• Asset Management

• Broking

• Investment Management

• Broker/Dealer• Private Equity fund

• Realty fund

6

® Awards & RecognitionAwards and Recognition

∞ Kotak Securities was awarded leading Equity house in India for 2007 by Thomson Extel Survey Awards for Asia Pacific

∞ Kotak Capital - Best Investment Bank in India : 2007,2006∞ Kotak Securities - Best Broker : 2006, 2005

∞ Kotak Mahindra Capital Company was ranked No. 1 by Bloomberg for the nine months of calendar year 2007 for

India Domestic IPOsIndia Domestic Equity Offerings (IPO, Additional Offerings and QIP)

∞ Bank IT team got 6 awards (including Best IT Team of the year for the 2nd consecutive year, Best overall winner), organized byIBA in recognition of achievements in Banking Technologies.

∞ Bank emerged in top 3 in 23 categories, including No.1 in 11 categories in the Euromoney Private Banking Poll 2008

∞ www. Kotak.com was voted the most Popular Investor Relation Website for Asia/Pacific

Award for ExcellenceAward for Excellence

ACHIEVEMENTACHIEVEMENTAWARDSAWARDS

20012003

ACHIEVEMENTACHIEVEMENTAWARDSAWARDS

20012007

7

® Awards & RecognitionAwards and Recognition

∞ Kotak Securities - The Most Customer Responsive Company :2006

∞ Kotak Mutual – “Best Debt Fund House” and “wealth creator award” at Outlook Money NDTV Profit 2007

∞ 'Kotak Bond Regular Plan' was ranked ICRA-MFR1 and was the recipient of the Silver Award

∞ Kotak Mutual - Best Bond Fund House: 2006 ∞ Kotak Bond Regular Plan was ranked the best debt fund over 3

years :2006

∞ Kotak Securities - Topped the Brokers Poll as the Best Local Broker: 2006

∞ Kotak Bank - Winner in 33 categories in the Asiamoney Private Banking Poll :2006; including the Best Private Bank award in South Asia

8

® Awards & RecognitionGeographical Presence

Servicing approx 3.6 mn customer accounts in 344 cities and towns in India

Strong National Footprint… …Expanding Global Presence

Offices in New York, London, Dubai, Mauritius and Singapore

New York

London

Mauritius

Dubai

Singapore

9

® Awards & RecognitionGroup Overview

Group Employees

Kotak Bank # 10th Best employer in India by Hewitt

Associates : 2007

1,5003,000

4,400

6,700

10,800

17,100

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

FY03 FY04 FY05 FY06 FY07 Dec-07

(Nos

.)

10

®

Life Insurance

Corporate &Investment

Bank

Investment Services

Retail Bank

Integrated Financial Services Conglomerate

11

®

Section II :Overview of Kotak Group BusinessSection II :Overview of Kotak Group Business

12

® Retail Assets

Total Advances (Rs bn) Advances Rs 214.2 bn (Dec 07)

Growth in Advances – Dec 07 v/s Dec 06

∞ Consolidated NIM

Q3FY08 – 5.7%

FY07 – 5.1%

∞ Stressed assets portfolio Rs 6.0 bn; Principal outstanding Rs 39.1 bn –potential for significant returns

∞ Consolidated NIM

Q3FY08 – 5.7%

FY07 – 5.1%

∞ Stressed assets portfolio Rs 6.0 bn; Principal outstanding Rs 39.1 bn –potential for significant returns

*Excluding stressed assets portfolio

Retail BankRetail Bank

*

47

71

104

156

214

30

0.25%

0.18% 0.18% 0.17%

0.33%

0.21%

0

50

100

150

200

250


(Rs.

Bn)

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

(%)

Retail Loan Growth NPA (%)

Others18%

ARD2%

Home11%

Agri6%Cars

20%

Corporate14%PL

13%

CV / CE16%

32.040.0 46.0

70.0

158.0

0

20

40

60

80

100

120

140

160

180

Cars CVs Home PL Agri

(%)

13

® Retail Liabilities

Customer Focus Footprint

Presence

Reta

il Ba

nk10 mn households

~ 40 mn people

High Net-worth

Super Affluent

Mass Affluent

Mass Retail

∞ Focus on HNI and mass affluent population

Convenience and solutions led strategy

∞ Distribution of multiple financial products ∞ Target 250 branches by December 2008

∞ Focus on HNI and mass affluent population

Convenience and solutions led strategy

∞ Distribution of multiple financial products ∞ Target 250 branches by December 2008


17 38 65 105 1491 125

46

77

135

240

0

20

40

60

80

100

120

140

160


Bra

nche

s (N

os.)

0

50

100

150

200

250

300

ATM

s (N

os.)

Branches ATMs

Metro51%

Rural7%

Semi Urban19%

Urban23%

14

® Retail Liabilities (Cont’d.)

Deposit Accounts

Total Deposit Breakdown* (Rs mn) (Dec 07) CASA Ratio


*excluding monies received as collection bankers

15,10066,300

168,000

350,000

640,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

FY04 FY05 FY06 FY07 Dec-07

(Nos

.)

1012

19

2224

0

8

16

24

32


(Nos

.)

Term Deposits, 108,317

Current, 21,230

Savings, 13,241

15

®

One of the leading Wealth Management teams in India

Wealth Management

∞ Focus on HNI customers (investible surplus > US$ 1 mn)Manage /advise wealth of over 3,700 familiesAround 30% of the top 300 wealthy families in India

∞ Presence in 14 cities with over 110 relationship managers∞ One of the leading distributors of equity products in India∞ Thrust on structured products∞ Bank emerged in top 3 in 23 categories, including No.1 in 11 categories in the

Euromoney Private Banking Poll 2008

∞ Focus on HNI customers (investible surplus > US$ 1 mn)Manage /advise wealth of over 3,700 familiesAround 30% of the top 300 wealthy families in India

∞ Presence in 14 cities with over 110 relationship managers∞ One of the leading distributors of equity products in India∞ Thrust on structured products∞ Bank emerged in top 3 in 23 categories, including No.1 in 11 categories in the

Euromoney Private Banking Poll 2008

Wide Range of Products

Portfolio Management

Services

Mutual Funds Private Equity Equity and DerivativesLife Insurance

Real Estate fund Structured Products IPO

Investment ServicesInvestment Services

16

® Securities Brokerage

India’s leading securities brokerage firm – 7.8% of total average daily volumes (9 months – Dec 07)India’s leading securities brokerage firm – 7.8% of total average daily volumes (9 months – Dec 07)

PMS – AUM (Rs bn)

KS Average Daily Volumes (Rs bn)

Research Coverage

Branches*


* Includes franchisees

27

11

24

37

56

0

10

20

30

40

50

60


(Rs.

bn)

275

500

660

813 867

110155

232277 309

0

100

200

300

400

500

600

700

800

900


(Nos

.)

Branches Cities

3

11

18

2623

46

05

101520253035404550


(Rs.

bn)

No of Companies

128

171

0

20

40

60

80

100

120

140

160

180

Institutional Retail

(Nos

.)

17

® Asset Management

∞ Over US$11.7 bn of assets managed / advised through mutual funds,insurance, portfolio management & offshore funds (including alternate assets) – 62% in equity

∞ Kotak Mutual Fund has 71 branches and satellite offices

Segment Overview

Assets Under Management* Equity AUM – Dec 07


0.5 1.03.3 3.3

7.2

1.3

1.9 2.4

4.5

1.10.60

2

4

6

8

10

12

14


(US$

bn)

Equity Debt

0.71.6 2.3

5.25.7

11.7

Offshore Funds50%

Alternate Assets

13%

Insurance5%

Portfolio Mgt.17%

Mutual Funds15%

18

® Alternate Assets

Realty FundPrivate Equity Fund

∞ Kotak India Real Estate Fund – I Domestic fund raised to make investments in real estate sector and allied services

Corpus approx. US$ 100 mn

100% committed

Has invested in 9 companies

∞ Kotak Alternate Opportunities (India) Fund

Domestic fund raised to make investments in real estate and infrastructure sector and allied services


Closed in July 2007

25% committed

∞ Kotak India Realty Fund Limited

Offshore fund: 1st closing corpus US$ 200 mn

Currently raising the 2nd tranche

∞ Kotak India Real Estate Fund – I Domestic fund raised to make investments in real estate sector and allied services


100% committed

Has invested in 9 companies

∞ Kotak Alternate Opportunities (India) Fund

Domestic fund raised to make investments in real estate and infrastructure sector and allied services


Closed in July 2007

25% committed

∞ Kotak India Realty Fund Limited

Offshore fund: 1st closing corpus US$ 200 mn

Currently raising the 2nd tranche

∞ India Growth fundReceived commitments of US$ 170 mn

90% committed

Invested in 13 companies

∞ Kotak India Venture FundReceived commitments of over US$ 66 mn

Focused on Biotechnology and Life Sciences sector

25% committed

∞ Currently raising a domestic fund

∞ India Growth fundReceived commitments of US$ 170 mn

90% committed

Invested in 13 companies

∞ Kotak India Venture FundReceived commitments of over US$ 66 mn

Focused on Biotechnology and Life Sciences sector

25% committed

∞ Currently raising a domestic fund


∞ Total commitments of US $ 936 mn

19

® International Subsidiaries

Registered with:FSC, SEBI, Central Bank of UAE

Kotak Mahindra International

Registered with: FSA, SEBI, DFSA, MAS

Kotak Mahindra (UK)

Registered with: NASD, SEC

Kotak Mahindra Inc.

∞ BusinessInvestment management / advisory

Financial intermediary

Management of GDR, ADR and FCCB

∞ Equity assets managed / advised: US$ 3.5 bnIncluding an Australian listed fund, SICAV fund and Shariah compliant fund

∞ Lead Manager - Prime Focus FCCB issue of Rs. 2.2 bn

UK

DubaiDubai

Mauritius

Singapore

USA


20

® Corporate BankingAn “integrated” approach

SME

CO

RPO

RATE

INVE

STM

ENT

BANK

Super Large

∞ Investment Banking products – Equity and M&A∞ Treasury solutions – Fixed Income, Structured products,

Derivatives - Rupee & Forex∞ Investment products ∞ Supply chain solutions

Large ∞ I-Banking products∞ Treasury solutions∞ Transaction Banking

∞ Investment products∞ Trade finance products∞ Supply chain solutions

Medium∞ Transaction Banking∞ Fund and fee based banking products∞ Private Equity – M&A

∞ Fund and fee based banking products∞ Promoter wealth management∞ Transaction Banking

Small

Corporate & Investment BankingCorporate & Investment Banking

21

® Investment BankingEquity Capital Market


India Domestic IPOs (No. 1 for CY 07)

India Domestic Equity Offerings* (No. 1 - CY 07)

Our Recent Transactions

5647

36 34

2519

0

10

20

30

40

50

60

KOTAK ENAM DSP CITI I-SEC JMMORGAN

(Rs.

bn)

9486

77 73

5245

0102030405060708090

100

KOTAK CITI DSP ENAM JMFINANCIAL

UBS

(Rs.

bn)

* Includes all eligible domestic equity offerings from Indian issuers including IPO, QIP and additional offerings; Source: Bloomberg

22

® Investment BankingMergers & Acquisitions


India Announced Deals*

No.4 in India League Tables for CY 2007No.4 in India League Tables for CY 2007

Major Announced Deals

Feb 2007

Sale of controlling interest in Hutchison Essar to Vodafone

Financial Advisor

Rs 537,100 mn

Mar 2007

Acquisition of Punjab Tractors and stake in its subsidiaries

Exclusive Advisor

Rs. 14,400 mn

Apr 2007

Divestment of 80% stake in Anchor Electricals to Matsushita Electrical Works

Exclusive Financial Advisor

Rs 20,000 mn

Mar 2007, Feb 2007

Demutualisation of BSE – Sale of 51% to Deutsche Bourse, SGX and others

Exclusive Financial Advisor

Rs 20,300 mn

June 2007

Joint Venture between SREI and BNP Paribas Leasing Group for a strategic partnership in

equipment finance in India

Exclusive Advisor

Rs. 7,800 mn

August 2007

Sale of controlling stake by Gokaldas Exports to Blackstone and Manager to the related Open Offer

Exclusive Advisor

Rs 6,600 mn

26,914

20,066

16,284 16,239

12,930

10,033

0

5,000

10,000

15,000

20,000

25,000

30,000

UBS GOLDMANSACHS

E&Y KOTAK MORGANSTANLEY

CITI

(USD

mn)

*Source: Bloomberg; Excludes open market repurchases

23

® Life Insurance

No. of Branches Premium Income

No. of Lives Insured* Tied Channel

Life InsuranceLife Insurance

* Including individual and group schemes* Including individual and group schemes

1,0141,893

3,427

5,530 5,234

619

9222,258

3,5663,276

1,847

241

354

534

252

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


(Rs.

mn)

Renewal PremiumSingle PremiumFirst Year Regular Premium

6,700 12,500 24,500 34,7146,850

460

950

3,059

300

1,820

0

6,000

12,000

18,000

24,000

30,000

36,000


(Life

Adv

isor

s (N

os.)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Sale

s M

anag

ers

(Nos

.)

Life AdvisorsSales Managers

41 44 45

74

106

0

20

40

60

80

100

120


(Nos

.)

86,200136,000

233,300342,000

775,000

1,121,100

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000


(Nos

.)

24

®

Section III :Financial SummarySection III :Financial Summary

25

® Financial Snapshot

Consolidated Net Profit (Rs mn) Consolidated Net Worth (Rs mn)

Consolidated Book Value per share (Rs) Earning Per Share (Rs)

733

1,742 1,709

3,425

5,382

7,511

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


(Rs.

Mn)

2.3

5.8 5.7

11.0

16.5

22.3

0.0

5.0

10.0

15.0

20.0

25.0


(Rs)

10,556 12,33414,668

22,471

32,330

56,091

0

10,000

20,000

30,000

40,000

50,000

60,000


(Rs.

Mn)

36 4148

73

99

163

0

20

40

60

80

100

120

140

160

180


(Rs.

)

26

® Consolidated Revenues

# brokerage income is net of sub-brokerage

28,707

688

5,258

4,923

7,558

10,280

Dec-06(9m)

42,940

1,283

6,769

9,505

10,563

14,820

FY07(12m)

Dec- 07(9m)

FY06(12m)Rs mn

56,86928,521Total Revenue

2,452151Others

14,9033,700Treasury

8,6426,121Insurance Premium

12,6918,670Fees #

18,1819,879Financing

27

® Consolidated - Financials

5.75.25.15.4NIM (%)

18.411.613.511.3Capital Adequacy Ratio (%)*

24.6#15.917.919.2Return on average Net worth (%)

14.28.98.88.1Tier I (%)*

94.8

Dec-06(9m)

72.7

FY06(12m)

163.099.1Book value per share (Rs)

Dec- 07(9m)

FY07(12m)

Rs %

* Bank Standalone# The return on average net worth is after considering additional capital of Rs. 16.2 bn raised in Oct 07

28

® Consolidated - Advances

137,139

22,354

4,645

20,774

15,771

16,800

32,891

23,904

Dec-06(9m)

104,199

17,506

4,192

13,357

9,707

10,069

30,637

18,731

FY06(12m)

214,200155,734Total Advances

50,99327,642Others

5,1655,123Stressed Assets acquired

29,57223,785Corporate Banking

23,02017,533Home Loans

28,65419,763Personal Loans

43,28236,108Car Finance

33,51425,781Commercial vehicles

Dec- 07(9m)

FY07(12m)

Rs mn

29

® Consolidated PAT

For FY06 all numbers are excluding non recurring profit on sale of stake in Hutch

3,679.1

(357.0)

4,036.1

(208.0)

109.8

4,134.3

0.8

110.2

102.3

270.8

1,806.4

473.1

329.6

1,041.1

Dec-06(9m)

(551.9)(431.8)(320.0)Kotak Mahindra Life Insurance (Group Share)

7,511.35,382.43,424.6Consolidated PAT

8,063.25,814.23,744.6Consolidated PAT (excl Life Insurance)

(7.1)

138.8

7,931.5

55.8

377.6

104.0

467.6

3,076.3

899.5

703.4

2,247.3

Dec- 07(9m)

114.776.3Kotak Mahindra AMC / Trustee

573.4208.8Kotak Mahindra Prime

(280.6)(945.0)MI and other adjustments (excl Life Insurance)

678.7565.7Kotak Mahindra Capital Company

2,557.12,155.4Kotak Securities

350.1132.7International Subsidiaries

262.5278.0Kotak Mahindra Investments

0.367.9Others

5,950.54,667.1Total (excl Life Insurance)

144.222.5Equity Affiliates

1,182.3

FY06(12m)

1,413.7

FY07(12m)

Rs mn

Kotak Mahindra Bank

30

® Consolidated PAT

Consolidated PAT for 9months of FY 08

- Rs 7,511.3 mn30

7.0

464.

7 1044

.3

1459

.3

389.

4

325.

0 833.

6

939.

0

2414

.6

442.

8

434.

3 818.

1

1695

.8

3637

.3

622.

0

642.

8 1308

.1

1703

.3

290.

2

0

500

1000

1500

2000

2500

3000

3500

4000

FY04 FY05 FY06 FY07 FY08

(Rs.

mn)

Q1 Q2 Q3 Q4

31

® Disclaimer

This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of Kotak Mahindra Bank Limited (the “Bank”) and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. No offering of securities of the Bank will be made except by means of a statutory offering document containing detailed information about the Bank.

This presentation is not a complete description of the Bank. Certain statements in the presentation contain words or phrases that are forward looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward looking statement. Any opinion, estimate or projection herein constitutes a judgment as of the date of this presentation, and there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The information in this presentation is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the Bank. We do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after the date of this presentation or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

All information contained in this presentation has been prepared solely by the Bank. No information contained herein has been independently verified by anyone else. No representation or warranty (express or implied) of any nature is made nor is any responsibility or liability of any kind accepted with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied) or omissions in this presentation. Neither the Bank nor anyone else accepts any liability whatsoever for any loss, howsoever, arising from any use or reliance on this presentation or its contents or otherwise arising in connection therewith. This presentation may not be used, reproduced, copied, distributed, shared, or disseminated in any other manner.

The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions.

Thank you

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