MUMBAI, Oct 21 Reuters Shares of India39;s Kotak Mahindra Bank and RBL Bank slumped on Monday as the lenders reported a jump in bad loans that hurt their secondquarter profit and margins, a trend that could continue for a few more quarters.
Kotak39;s shares slid as much as 6 to a near twomonth low in early trade, while those of RBL tumbled 14 to their lowest since June 2023.
Kotak39;s slippages, or the proportion of good loans turning bad, jumped 38 onquarter for the JulySeptember period, while midsized lender RBL39;s slippages were 10.26 billion rupees, almost doubling from a year ago and up nearly 43 from the prior quarter.
The pressure was mainly in the credit card and microfinance businesses and is expected to linger for a few more quarters, the lenders said over the weekend when they reported their results.
… We39;ve seen some stress in the microfinance industry as well as some overleveraging of customers, which reflects in personal loans and credit cards, Kotak CEO Ashok Vaswani said on a media call.
Around 3040 of Kotak39;s slippages came from the credit card business, Vaswani said.
The quality of Indian lenders39; unsecured loans is showing signs of stress due to continuing pressure on cash flows in certain endborrower segments, India Ratings said earlier this month.
The deterioration in asset quality weighed on the lender39;s profit and margins. Kotak39;s secondquarter net profit missed expectations, while RBL Bank39;s fell 24 onquarter, with both…