Now pausing on further acquisitions and focusing on organic growth, the second largest UCB in India, Cosmis Co-op Bank has decided against converting into a small finance bank (SFB), citing the robustness of its current structure and ethos for future expansion.
“We are not actively seeking acquisitions. Instead, we will consolidate our setup and operations to grow the business,” stated Milind Kale, chairman of Cosmos Bank, during the media briefing on the financial results for FY24.
Cosmos Co-operative Bank, based in Pune, has acquired 18 urban co-operative banks (UCBs) over the last 25 years. Recently, Mumbai-based Maratha Sahakari Bank, with 7 branches, and Sahebrao Deshmukh Sahakari Bank, with 11 branches, merged into Cosmos Bank in FY24. These mergers have increased Cosmos Bank’s branch count in Mumbai to 50. Currently, the bank operates 170 branches across 7 states.
Addressing the competition from small finance banks, Kale emphasized the shift in focus towards reaching out to customers, particularly small businesses with loan exposures of below Rs 1 crore. While Cosmos Bank may adopt some business practices of small finance banks, it does not see the need to convert into an SFB.
Cosmos Bank’s net profit more than doubled to Rs 384 crore in FY24, up from Rs 151 crore in FY23. Loans increased to Rs 15,192 crore in March 2024 from Rs 13,116 crore the previous year, while deposits grew to Rs 20,216 crore from Rs 17,629 crore by the end of March 2023.
The bank aims for a 15% growth in deposits and advances in FY25. It plans to increase the share of retail loans, including those to small businesses and households, from the current 43% to 50% by March 2025. The bank will slow down lending to large customers with exposures over Rs 1 crore, which currently make up 57% of its portfolio.
Bank has also distributed one month’s salary as bonus to its hundreds of employees in the wake of unprecedented performance.
