Kotak Mahindra Bank has 'high ambitions' to deploy capital for growth, CEO says

MUMBAI: Kotak Mahindra Bank is looking for acquisitions, including loan portfolios, while further expanding into alternative assets and other non-banking businesses, its chief executive said, as the Indian lender looks to deploy excess capital to drive growth.

Founded by billionaire Uday Kotak, it aims to become India’s third-largest private lender by after-tax profit, CEO Ashok Vaswani told Reuters in an interview on Monday afternoon. “I have very high ambitions,” Vaswani said.

He said he was interested in “both organic and inorganic” growth when the right opportunity came along. He declined to give a number for a potential acquisition size.

Kotak Mahindra ranks behind HDFC Bank, ICICI Bank and Axis Bank among India’s private sector lenders in terms of after-tax profit.

It had initially expressed interest in buying a stake in government-owned IDBI Bank but later exited the process over concerns about high valuations. It has also been in discussions to acquire Deutsche Bank’s India retail business. Those talks remain “in the works,” Vaswani said, without giving details.

It acquired Standard Chartered’s personal loan portfolio in India in 2025 and micro lender Sonata Finance in 2023. It will continue to target alternative assets as long as strong returns remain on offer, he said.

The bank, which has an investment in commodity exchange MCX, is looking for other opportunities in infrastructure that underpins financial markets.

“We really, really like financial markets infrastructure,” Vaswani said. “I’m very interested in that space.”

The pressure to deploy funds comes as its surplus capital drags down the return on capital, a key profitability measure. Its capital adequacy ratio is 23%, above the regulatory minimum of 9% and the 16% to 19% for the country’s top three private banks.

Vaswani expects to expand the loan book at a faster pace than the overall banking industry by focusing on affluent customers and what he called “core India”, including the country’s middle class and small businesses.

Tech, AI to curb hiring growth

While the lender faced regulatory curbs between 2024 and 2025 due to IT infrastructure lapses, it is now spending about 13% of its operating expenses on technology.

This level of spending will continue as the bank invests in cybersecurity and pushes to improve efficiency by using AI.

Kotak has expanded its balance sheet by over 17% over the past year without increasing overall headcount, Vaswani said.

While hiring will continue, workforce growth will be “far smaller” than balance-sheet growth, he said.