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Karur Vysya Bank has reported
strong 51% growth in net profit at Rs 378.45 crore for the quarter ended
September 2023 (Q2FY2024). The bank has posted healthy 11% growth in net interest
income (NII), while the core fee income of the bank also improved 13% in
Q2FY2024. The Net Interest Margin (NIM) of the bank was nearly steady at 4.07%
in Q2FY2024 compared to 4.10% in the corresponding quarter of previous year.
On business front, the bank as has posted 14%
growth in business with healthy 15% surge in loan book. The asset quality of
the bank was stable in Q2FY2024. Bank has substantially improved the credit to
deposit ratio to 84.8% at end September 2023 from 83.0% at end September 2022.
However, the CASA ratio of the bank has declined to 32.3% at end September 2023
from 35.2% at end September 2022.
Asset quality improves: The bank has continued to improve asset quality
with fresh slippages of loans under control in Q2FY2024.
The fresh slippages of loans stood at Rs 155
crore in Q2FY2024 compared with 150 crore in previous quarter and Rs 131 crore
in the corresponding quarter last year.
The recoveries and upgradations of NPAs stood at
Rs 115 crore and the write-off of loans was at Rs 151 crore in Q2FY2024.
The standard restructured loan book of the bank
eased to Rs 847 crore end September 2023.
Provision coverage ratio improved to 94.49% at
end September 2023 compared to 93.41% a quarter ago and 86.94% a year ago.
The capital adequacy ratio of the bank stood at
16.8% with Tier I ratio at 15.2% at end September 2023.
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Asset Quality
Indicators: Karur Vysya Bank
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Sep/23
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Jun/23
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Mar/23
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Dec/22
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Sep/22
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Variation
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QoQ
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YTD
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YoY
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Gross NPA (Rs Crore)
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1219.08
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1329.65
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1458.15
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1674.34
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2456.53
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-8
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-16
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-50
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Net NPA (Rs Crore)
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323.63
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390.02
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468.15
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550.43
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818.72
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-17
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-31
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-60
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% Gross NPA
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1.73
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1.99
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2.27
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2.70
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4.02
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-26
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-54
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-229
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% Net NPA
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0.47
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0.59
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0.74
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0.90
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1.38
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-12
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-27
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-91
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% PCR
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94.49
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93.41
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92.14
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90.87
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86.94
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108
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235
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755
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% CRAR - Basel III
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16.84
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17.67
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18.56
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17.62
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18.31
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-83
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-172
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-147
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% CRAR - Tier I -
Basel III
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15.19
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15.96
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16.79
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16.00
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16.42
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-77
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-160
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-123
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Healthy business growth: The business of the bank has increased 14% YoY
to Rs 153517 crore end September 2023, driven by 15% surge in advances to Rs
70448 crore. Deposits rose 13% to Rs 83069 crore at end September 2023.
CASA deposits ratio declines: The CASA deposits of the bank rose 3% YoY to Rs
26794 crore at end September 2023. The current account deposits increased 2% to
Rs 8155 crore, while saving account deposits rose 3% to Rs 18639 crore end
September 2023. The CASA ratio eased to 32.3% at end September 2023 compared to
35.2% at end September 2022, while declined from 32.9% a quarter ago. The term
deposits have increased 18% to Rs 56275 crore end September 2023.
Healthy loan growth: Advances growth was driven by retail loans
rising 17% YoY to Rs 16225 crore at end September 2023, while credit to
agriculture increased 18% to Rs 16302 crore and MSME 19% to Rs 23510 crore at
end September 2023. The corporate credit also improved declined 5% to Rs 14411
crore end September 2023.
Within
the retail loan book, the housing loans grew 16%, gold loans 20%, mortgage
loans 29% and personal loans 16%, while the vehicle loans increased at slower
pace of 2% end September 2023.
Within
the corporate loan book, about 69% of the corporate loan book is less than Rs 100
crore. Average ticket size stands at Rs 39.6 crore.
Investment
book of the bank increased 14%
YoY to Rs 21413 crore at end September 2023. The AFS book jumped 45% to Rs 5139
crore, while HTM book rose 6% to Rs 16274 crore at end September 2023. The
duration of the overall investment portfolio stood at 2.95 years end September
2023 compared with 3.02 years at end September 2022.
Margins steady: The bank has showed 107 bps YoY jump in cost of
deposits to 5.16%, while yield on advances increased 112 bps YoY to 9.76% in
Q2FY2024. NIM has eased 3 bps YoY to 4.07% in Q2FY2024.
Branch expansion: The bank has added 16 branches and 4 ATMs in
Q2FY2024, taking overall tally to 824 branches and 2244 ATM`s end September 2023.
The employee base of the bank has jumped to 9086 employees end September 2023
from 7764 employees end March 2023.
Book value of the bank stood at Rs 114.2 per share at end September 2023,
while the adjusted book value (net of NNPA and 10% of restructured advances)
was Rs 109.1 per share at end September 2023.
Quarterly Performance
NII rises on stable NIMs: Bank has recorded 26% increase in the interest
earned at Rs 1997.08 crore, while interest expenses increased 43% to Rs 1081.70
crore in Q2FY2024. NII improved 11% to Rs 915.38 crore in the quarter ended
September 2023.
Healthy growth in the core fee income: Bank has posted 13% growth in core fee income to
Rs 197 crore, while the recoveries and other income jumped 109% to Rs 142 crore
leading to 40% surge in the overall non-interest income to Rs 338.89 crore in
the quarter ended September 2023.
Expenses ratio rises: The operating expenses of the bank increased 26%
to Rs 616.36 crore, as other expenses moved up 12% to Rs 288.72 crore, while
employee expenses increased 40% to Rs 327.64 crore in Q2FY2024. Cost to income
ratio moved up to 49.1% in Q2FY2024 compared with 46.2% in Q2FY2023, allowing
to the operating profit to rise 11% to Rs 637.91 crore.
Provisions and contingencies dip: The bank has showed 44% decline in provisions to
Rs 126.41 crore. The loan loss provisions declined 35% to Rs 134 crore, while the
bank has written back investment provisions of Rs 1 crore and standard asset
provisions of Rs 7 crore in Q1FY2024.
Effective tax rate declined to 26.0% in Q2FY2024 from 27.5% in Q2FY2023. Net
Profit rose by 51% YoY to Rs 378.45 crore during quarter ended September 2023.
Financial Performance H1FY2024:
Bank has posted 54% increase in net profit to Rs
737.08 crore in the half year ended September 2023 (H1FY2024). The net interest
income increased 16% to Rs 1812.45 crore, while non-interest income moved up
53% to Rs 672.05 crore, pushing up net total income by 24% to Rs 2484.50 crore
in H1FY2024. The operating expenses increased 25% to Rs 1198.17 crore, while
provision and contingencies declined 25% to Rs 285.83 crore, allowing profit
before tax to increase 50% to Rs 1000.50 crore in H1FY2024. The cost-to-income
ratio rose slightly to 48.2% in H1FY2024 compared to 47.8% in H1FY2023. An
effective tax rate declined to 26.3% in H1FY2024 compared to 28.1% in H1FY2023.
The net profit has increased 54% to Rs 737.08 crore in H1FY2024.
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Karur Vysya Bank: Results
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Particulars
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2309 (3)
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2209 (3)
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Var %
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2309 (6)
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2209 (6)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Interest Earned
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1997.08
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1579.48
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26
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3879.99
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3053.01
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27
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6516.55
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5587.67
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17
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Interest Expended
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1081.70
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758.13
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43
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2067.54
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1485.78
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39
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3167.74
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2872.30
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10
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Net Interest Income
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915.38
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821.35
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11
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1812.45
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1567.23
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16
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3348.81
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2715.37
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23
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Other Income
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338.89
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241.57
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40
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672.05
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440.64
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53
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1158.94
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769.06
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51
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Net Total Income
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1254.27
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1062.92
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18
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2484.50
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2007.87
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24
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4507.75
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3484.43
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29
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Operating Expenses
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616.36
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490.60
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26
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1198.17
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960.08
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25
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2031.96
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1854.22
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10
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Operating Profits
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637.91
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572.32
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11
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1286.33
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1047.79
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23
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2475.79
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1630.21
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52
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Provisions &
Contingencies
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126.41
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227.19
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-44
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285.83
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381.83
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-25
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1038.93
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699.29
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49
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Profit Before Tax
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511.50
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345.13
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48
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1000.50
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665.96
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50
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1436.86
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930.92
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54
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EO
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0.00
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0.00
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-
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0.00
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0.00
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-
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0.00
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0.00
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-
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PBT after EO
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511.50
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345.13
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48
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1000.50
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665.96
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50
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1436.86
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930.92
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54
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Provision for tax
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133.05
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94.90
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40
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263.42
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186.98
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41
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330.77
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257.65
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28
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PAT
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378.45
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250.23
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51
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737.08
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478.98
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54
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1106.09
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673.27
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64
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EPS*(Rs)
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18.9
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12.5
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18.4
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11.9
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13.8
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8.4
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Adj BV (Rs)
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109.1
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87.6
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109.1
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87.6
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100.0
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77.1
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* Annualized on current equity of
Rs 160.53 crore. Face Value: Rs 2, Figures in Rs crore
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Source: Capitaline Corporate
Database
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