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Kotak Mahindra Bank Ltd.’s private banking sector is expected to add thousands of new households to its portfolio as it attempts to scale up to fall in profit margins with India’s growing wealth management industry.
According to its annual report, the billionaire Uday-backed division added 2,280 new households to its client base in the year to March 2024, more than triple the 711 new households it added a year ago. Kotak Mahindra Bank is one of the top wealth managers in India.
“We want to keep the same acquisition rate as the previous year,” said Vodhi Chakravartty, head of strategy at Kotak Private Banking. Chief Executive Oisharya Das said the private bank’s managed assets grew more than 30% last year. The company said it serves 60% of the top 100 households in India.
“It’s a downward margin business and it really has to build scale,” Darth said, adding that technology will be the key difference in the sector.
Competition has been exacerbated by India’s booming wealth market, with global banks constantly increasing their presence from HSBC Holdings plc to Julius Baer Group, while standard chartered PLCs have expanded to smaller towns. UBS Group AG is in senior talks with India’s 360 WAM Ltd., a deal that will bring Swiss banks into contact with the country.
Kotak Private caters to wealthy Indians who have over $1 million in investable assets and over $30 million in super high Network individuals. As of December 31, 2024, Kotak Mahindra Bank has assets under management of Rs 8.86 trillion (US$103 billion) of private banks, priority banks and investment advisory units.
India’s wealth market has grown rapidly in recent years, due to strong economic growth, booming stock markets, exiting from businesses and increasing wages. According to a report released by Kotak Private on Wednesday, the country has 283,000 wealthy people with assets worth more than $5 million, worth more than $5 million, worth Rs 23.2 trillion ($2.7 trillion). The report said that by 2028, the asset’s assets are expected to jump 52% to Rs 430,000.
DAS said private banks plan to expand in smaller cities and take advantage of Indian diaspora who are keen to invest in the country’s assets. “We are considering hiring more in some pockets, where we see gaps – tier 2, tier 3 cities, and we see growth in the business.”
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