Kotak’s Vaswani plots growth chart, sees ‘right to win’ in four segments

Kotak Mahindra Bank Ltd has identified four priority segments—affluent customers, mass-market retail, small and medium enterprises, and institutional business—where it believes it has a “clear right to win” and can grow faster than the market, managing director and chief executive Ashok Vaswani said in his annual letter to shareholders.

This could well be his last annual letter to shareholders as the chief executive. Mint had reported on 27 June that Kotak is set for a leadership change, with Vaswani looking to depart, not wishing to seek reappointment when his term ends on 31 December 2026.

“We have picked four focus segments where we believe we have a clear right to win, given the natural advantages of our model,” Vaswani wrote in the letter dated 6 July in the annual report for 2025-26. Around each segment, he said, the bank has built holistic propositions with an aim to grow disproportionately and gain market share over time.

At the top end, the bank is leaning on Solitaire, its high-net-worth proposition, alongside the Private Bank. Vaswani said Solitaire’s HNI proposition now holds relationship value of over ₹10 trillion across more than 66,000 families, with the customer numbers and the depth of relationships growing steadily.

At the other end sits Kotak811, which Vaswani said is extending the bank’s reach into what he called a large and still underpenetrated “Core India” segment, mass-market savers in smaller cities and towns who bank on an app rather than at a branch. Digital onboarding and servicing lifted 811 savings balances 32% from a year earlier. They now make up 12.2% of the bank’s total savings account balances.

Kotak’s SME advances were at ₹1.2 trillion, up 19% year-on-year, and now account for 24% of total advances, while the institutional business continues to deliver returns, aided by income from syndication and foreign exchange.

Two more pillars

Vaswani identified two more pillars alongside the segment strategy: independent product businesses within the bank, and technology, digital and artificial intelligence (AI). The former, spanning tractor finance, commercial vehicles and construction equipment, carries more than two decades of domain expertise. Kotak ranks second in tractor finance and among the top five financiers in commercial vehicles and construction equipment.

On technology, its cost-to-assets improved to 2.75% in FY26 from 3.02% in FY25, and more than 200 branch processes have been centralized.

Vaswani called AI a “clear inflection point,” and said the bank has deployed knowledge assistants and sales enablement tools for employees, while voice agents now interact with customers directly.

Vaswani also flagged an appetite for inorganic scale, saying the bank will continue to pursue opportunities that enhance scale, capabilities and customer reach, citing the acquisition of Deutsche Bank’s retail business.

The consolidated balance sheet has crossed ₹10 trillion, with group assets under management at ₹7.5 trillion. Subsidiaries contributed 27% of consolidated profits. Deposits grew 14.7% and net advances 16.2%, while consolidated book value per share has grown 15% a year over five years.

Vaswani said he was confident the next phase of Kotak’s journey would be defined by focused execution and compounding outcomes, while keeping the culture of risk and governance intact.

“Scale matters. But it must be responsible, profitable and built to endure,” he wrote.