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“The bank is also upping its focus on the structured finance offerings, whose contribution in the overall wholesale book is in low single-digits at present and growing the same”
Kotak Mahindra Bank is set to create a separate vertical for mid-market companies having turnover between Rs 500-1,500 crore to increase its focus on the segment.
The private sector lender is also keen to increase its focus on high-margin structured finance, a top official has said.
At present the mid-market segment is part of the large corporate team, which covers companies between Rs 500-6,000 crore. From April 1 onwards, the new vertical will be created, while the large corporate team will serve clients having revenues between Rs 1,500-6,000 crore.
“Our large corporate growth is relatively benign compared to SME (under Rs 500 crore revenue companies) growth, and that is one of the reasons for this change. Mid-market opportunity is large and we believe we are under penetrated in this segment,” Paritosh Kashyap, president and head of wholesale banking, told PTI.
Kashyap said the bank had a mid-market team about four years ago, and added that the latest reorganisation is needed to focus more on the segment and grow it faster than what it would have grown under the older way. The bank will serve the mid-market opportunity from about 15 dedicated locations, Kashyap said, adding that the SME segment is served from 50 locations and the number is much smaller for large corporates.
It is putting together a team largely drawn from internal employees already catering to this business and transferring them into the newly created mid-market vertical, Kashyap said, adding that some talent will also be hired from outside.
The bank is also upping its focus on the structured finance offerings, whose contribution in the overall wholesale book is in low single-digits at present and growing the same, Kashyap said.
“Typically these are non standard financing requirements with relatively better collaterals and higher margins. As of now our exposure is in the low single-digit. We want to grow this book,” he said.Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd
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