Kotak Bank increases number of branches by 80% in five years – Banking and financial news

Kotak Mahindra Bank plans to expand its branch count by 80% to around 3,500 over the next five years, as the bank looks to expand its presence across the country.

The country’s fourth-largest lender plans to add around 1,500 branches to its current network, which currently stands at around 1,965. The lender added 168 branches in the previous financial year and aims to open 200-250 branches annually over the next five years.

“We are not going to be a primary branch bank, that is not going to happen. But branches and physical network will remain a very important part of our distribution network,” CEO Ashok Vaswani said in an analyst call. “We are going to expand our branch network, we were close to 150 (branches), it will go to about 200, and later to about 250 branches, until we reach that number of between 3,000 and 3,500 in a period of four to five years.”

The bank will add up to 200 branches in the current fiscal year, about 20% more than the new branches added in 2023-24. The total number of branches stood at 1,948 as on March 31 this year. About 45% of the branches are in metros. According to the latest investor presentation, the bank has 896 branches in metros and 430 in urban areas. In semi-urban and rural areas, the number of branches stands at 311 and 328 respectively. Urban areas continue to be the bank’s focus.

“We believe that by providing the current kind of branch infrastructure to the top 68 cities and making the branch a Kotak-like asset that is accessible or utilised by SMEs (small and medium enterprises), commercial enterprises and consumer businesses, we can achieve maximum impact for our branches,” Vaswani said.

He doesn’t expect the cost-to-income ratio to go up significantly with this expansion, because the locations will generate revenue. “I don’t think we’ll see a significant increase in cost-to-income. In fact, as we transform for scale and technology In order to play, we hope to make a dent in our cost-to-income ratio over the next four to five years.”

The plan to expand the branch comes after the lender was barred by the Reserve Bank of India to add customer digitally. On April 24, the RBI Kotak Mahindra Bank is excluded from issuing new credit cards to onboarding new customers through its online and mobile banking channels with immediate effect.