This effectively revives speculation around one of Indian banking’s longest-pending deals. Kotak has long been considered among the more credible suitors for IDBI, and Vaswani’s willingness to keep the door open signals that the strategic appetite has not dimmed.
He offered no further detail, calling inorganic growth broadly a long-term play for Kotak.
The more immediate concern, he said, is the West Asia conflict, which has thrown an unexpected shadow over what was shaping up to be a strong start to FY27.
Corporate India was in good shape heading into the new fiscal year, with government capital expenditure providing broad-based growth momentum, he further explained adding that momentum has now been interrupted.
Also Read: Kotak Mahindra Bank Q4 Result: Net profit rises 13% YoY; Asset quality improves, dividend announced
Vaswani said he expects it to resume once conditions stabilise, but acknowledged that committing to specific growth targets right now would be premature.
“Every day is a new scenario,” he said. “We are keeping probabilities open and hope this will not be a long-term play.”
The conflict’s most visible impact is being felt at the lower end of the borrower spectrum, where smaller enterprises with trade linkages to the region are under the most pressure, he explained.
Despite this, Vaswani was firm that the bank sees no need for additional provisioning, pointing to a capital adequacy of 22% as sufficient cushion.
On asset quality, the picture from Q4 was encouraging. Vaswani said the worst of the credit cycle is behind them, with gross NPA improving to 1.20% in the quarter. The Sonata-BSS merger integration is yielding results, with active destressing visible across the microfinance portfolio, he explained.
Going into FY27, Kotak is focusing on microfinance and credit cards as priority growth segments and is looking to rebuild its unsecured retail book, currently at 8.9% of advances, toward pre-COVID levels, he added.
On margins, NIM compression through FY27 is on the cards as the deposit market tightens and rate cuts feed through the system, he then explained and added that the bank is not looking to aggressively bring its credit-to-deposit ratio down, preferring to grow deposits and assets together rather than chase either in isolation.
