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Karnataka Bank has reported 105% surge in net profit at Rs 300.68 crore for
the quarter ended December 2022 (Q3FY2023). The bank has posted healthy 34% growth
in net interest income (NII), while the core fee income of the bank also
improved 13% in Q3FY2023. The Net Interest Margin (NIM) of the bank improved to
3.81% in Q3FY2023 compared to 3.16% in the corresponding quarter of previous
year.
On business front, the bank as has posted 10% growth in
business with strong 13% surge in loan book. The asset quality of the bank was
stable in Q3FY2023. Bank has substantially improved the credit to deposit ratio
to 73.9% at end December 2022 from 70.9% at end December 2021. Further, the
CASA ratio of the bank has also improved to 31.9% at end December 2022 from 31.3%
at end December 2021.
Asset quality improves: The
bank has maintained stable asset quality in Q3FY2023.
The fresh slippages of loans stood at Rs 377 crore in
Q3FY2023 compared with 303 crore in previous quarter.
The recoveries of NPAs stood at Rs 128.26 crore,
upgradations at Rs 68.28 crore and the write-off of loans was at Rs 146.57 crore
in Q3FY2023.
The standard restructured loan book of the bank net of
provisions stood at Rs 2671 crore end December 2022 compared to Rs 2861.74 crore
a quarter ago.
Provision coverage ratio improved to 80.21% at end December
2022 compared to 79.97% a quarter ago and 73.74% a year ago.
The capital adequacy ratio of the bank stood at 15.1% with
Tier I ratio at 12.2% at end December 2022.
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Asset Quality
Indicators: Karnataka Bank
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|
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Dec-22
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Sep-22
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Jun-22
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Mar-22
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Dec-21
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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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2085.73
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2051.70
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2401.39
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2250.82
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2330.52
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2
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-7
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-11
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Net NPA (Rs Crore)
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1040.88
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1028.47
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1262.88
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1376.97
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1359.89
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1
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-24
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-23
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% Gross NPA
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3.28
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3.36
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4.03
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3.90
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4.11
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-8
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-62
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-83
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% Net NPA
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1.66
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1.72
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2.16
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2.42
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2.45
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-6
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-76
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-79
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% PCR
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80.21
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79.97
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76.77
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73.47
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73.74
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24
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674
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647
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% CRAR - Basel III
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15.13
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15.28
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15.41
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15.66
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14.15
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-15
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-53
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98
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% CRAR - Tier I -
Basel III
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12.20
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12.34
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12.44
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12.65
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11.74
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-14
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-45
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46
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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 10% YoY to Rs 147129 crore end December
2022, driven by 13% surge in advances to Rs 62532 crore. Deposits rose 8% to Rs
84597 crore at end December 2022.
CASA deposits ratio stable: The CASA deposits of the bank increased 10% YoY to Rs 26992 crore
at end December 2022. The CASA ratio improved to 31.9% at end December 2022
compared to 31.3% at end December 2021, while declined from 32.8% a quarter
ago.
Strong loan growth: Advances
growth was driven by MSME loan book rising 14% to Rs 18141 crore at end December
2022. The corporate credit has jumped 37% to Rs 14326 crore end December 2022.
The retail loans book rose 3% YoY to Rs 30065 crore at end December 2022.
Investment book of the bank rose 5% YoY to Rs 23136 crore at end December
2022. The AFS book increased 18% to Rs 5784 crore, while HTM book rose 1% to Rs
17352 crore at end December 2022. The duration of the overall investment
portfolio stood at 3.42 years end December 2022 compared with 4.26 years at end
December 2021.
Margins improve: The
bank has showed 14 bps YoY decline in cost of deposits to 4.54%, while yield on
advances jumped 64 bps YoY to 9.45% in Q3FY2023. Thus, the NIM has improved 65 bps
YoY to 3.81%.
Branch expansion: The
bank has added 5 branches and 7 ATMs in Q3FY2023, taking overall tally to 885 branches
and 1463 ATM`s end December 2022.
Book value of
the bank stood at Rs 237.0 per share at end December 2022, while the adjusted
book value (net of NNPA and 10% of restructured advances) was Rs 195.1 per
share at end December 2022.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 18% increase in the interest earned at Rs 1850.80
crore, while interest expenses increased 8% to Rs 1016.04 crore in Q3FY2023. NII
improved 34% to Rs 834.76 crore in the quarter ended December 2022.
Healthy growth in the core fee income: Bank has posted strong 13% growth in core fee income to Rs 256
crore, while the treasury segment witnessed loss of Rs 52 crore. The overall
non-interest income rose 4% to Rs 204.51 crore in the quarter ended December
2022.
Expenses ratio dips: The
operating expenses of the bank increased 10% to Rs 507.40 crore, as other
expenses moved up 8% to Rs 222.84 crore, while employee expenses increased 11% to
Rs 284.56 crore in Q3FY2023. Cost to income ratio dipped to 48.8% in Q3FY2023
compared with 56.5% in Q3FY2022, helping the Operating Profit to increase 49% to
Rs 531.87 crore.
Provisions and contingencies up: The bank has showed 19% increase in provisions to Rs 164.87 crore.
The loan loss provisions jumped 44% to Rs 160.70 crore, while standard asset
provisions rose 10% to Rs 38.25 crore and other provisions rebounded to Rs 15.37
crore. The bank has written back investment provisions of Rs 49.45 crore,
Effective tax rate declined to 18.1%
in Q3FY2023 from 32.7% in Q3FY2022. Net Profit surged by 105% YoY to Rs 300.68 crore
during quarter ended December 2022.
Financial Performance 9MFY2023:
Bank has posted 118% increase in net profit to Rs 826.49 crore
in the nine months ended December 2022 (9MFY2023). The net interest income
increased 27% to Rs 2325.05 crore, while non-interest income declined 14% to Rs
597.34 crore. Net total income increased 15% to Rs 2922.39 crore in 9MFY2023. The
operating expenses moved up 10% to Rs 1399.92 crore, while provision and
contingencies dipped 39% to Rs 513.93 crore, allowing profit before tax to
increase 146% to Rs 1008.54 crore in 9MFY2023. The cost-to-income ratio
improved to 47.9% in 9MFY2023 compared to 50.5% in 9MFY2022. An effective tax
rate increased to 18.1% in 9MFY2023 compared to 7.8% in 9MFY2022. The net
profit has surged 118% to Rs 826.49 crore in 9MFY2023.
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KarnatakaBank: Results
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Particulars
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2212 (3)
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2112 (3)
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Var %
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2212 (9)
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2112 (9)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Interest Earned
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1850.80
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1565.10
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18
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5250.93
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4642.88
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13
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6221.66
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6232.41
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0
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Interest Expended
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1016.04
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942.45
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8
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2925.88
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2808.34
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4
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3730.63
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4049.23
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-8
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Net Interest Income
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834.76
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622.65
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34
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2325.05
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1834.54
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27
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2491.03
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2183.18
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14
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Other Income
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204.51
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196.45
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4
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597.34
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696.98
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-14
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953.88
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1404.21
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-32
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Net Total Income
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1039.27
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819.10
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27
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2922.39
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2531.52
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15
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3444.91
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3587.39
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-4
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Operating Expenses
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507.40
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462.78
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10
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1399.92
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1277.64
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10
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1810.91
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1679.11
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8
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Operating Profits
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531.87
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356.32
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49
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1522.47
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1253.88
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21
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1634.00
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1908.28
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-14
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Provisions &
Contingencies
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164.87
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138.50
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19
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513.93
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843.53
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-39
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939.44
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1296.35
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-28
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Profit Before Tax
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367.00
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217.82
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68
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1008.54
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410.35
|
146
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694.56
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611.93
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14
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Provision for tax
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66.32
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71.25
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-7
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182.05
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32.08
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467
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185.94
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129.36
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44
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PAT
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300.68
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146.57
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105
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826.49
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378.27
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118
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508.62
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482.57
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5
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EPS*(Rs)
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38.5
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18.8
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35.3
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16.2
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16.3
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15.5
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Adj BV (Rs)
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195.1
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154.8
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195.1
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154.8
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155.8
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141.2
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* Annualized on current equity of
Rs 312.02 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate Database
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