|
Karnataka Bank has
reported 171% jump in net profit at Rs 353.75 crore for the quarter ended March
2023 (Q4FY2023). The bank has posted healthy 31% growth in net interest income
(NII), while the core fee income of the bank also improved 20% in Q4FY2023. The
Net Interest Margin (NIM) of the bank improved to 3.87% in Q4FY2023 compared to
3.25% in the corresponding quarter of previous year.
On business front, the bank as has posted moderate
7% growth in business with subdued 6% rise in loan book. The asset quality of
the bank has witnessed some pressure in Q4FY2023. Bank has substantially
improved the credit to deposit ratio to 68.6% at end March 2023 from 70.6% at
end March 2022. However, the CASA ratio of the bank has declined to 33.0% at
end March 2023 from 33.0% at end March 2022.
Asset quality witness pressure: The bank has witnessed some pressure on asset
quality due to elevated slippages of loans in Q4FY2023.
The fresh slippages of loans stood at Rs 587 crore
in Q4FY2023 compared with 377 crore in previous quarter.
The recoveries of NPAs stood at Rs 203.67 crore,
upgradations at Rs 67.11 crore and the write-off of loans was at Rs 79.25 crore
in Q4FY2023.
The standard restructured loan book of the bank
stood at Rs 2306 crore end March 2023 compared to Rs 2671 crore a quarter ago.
Provision coverage ratio was steady at 80.86% at
end March 2023 compared to 80.21% a quarter ago and 73.47% a year ago.
The capital adequacy ratio of the bank stood at 17.5%
with Tier I ratio at 14.2% at end March 2023.
|
Asset Quality
Indicators: KarnatakaBank
|
|
|
Mar-23
|
Dec-22
|
Sep-22
|
Jun-22
|
Mar-22
|
Variation
|
|
QoQ
|
YoY
|
|
Gross NPA (Rs Crore)
|
2292.91
|
2085.73
|
2051.70
|
2401.39
|
2250.82
|
10
|
2
|
|
Net NPA (Rs Crore)
|
1021.27
|
1040.88
|
1028.47
|
1262.88
|
1376.97
|
-2
|
-26
|
|
% Gross NPA
|
3.74
|
3.28
|
3.36
|
4.03
|
3.90
|
46
|
-16
|
|
% Net NPA
|
1.70
|
1.66
|
1.72
|
2.16
|
2.42
|
4
|
-72
|
|
% PCR
|
80.86
|
80.21
|
79.97
|
76.77
|
73.47
|
65
|
739
|
|
% CRAR - Basel III
|
17.45
|
15.13
|
15.28
|
15.41
|
15.66
|
232
|
179
|
|
% CRAR - Tier I -
Basel III
|
14.18
|
12.20
|
12.34
|
12.44
|
12.65
|
198
|
153
|
|
Variation in basis
points for figures given in percentages and in % for figures in Rs crore
|
Business Highlights:
Business growth ease: The business of the bank has increased 7% YoY to
Rs 147320 crore end March 2023, driven by 6% rise in advances to Rs 59952 crore.
Deposits rose 9% to Rs 87368 crore at end March 2023.
CASA deposits ratio improves: The CASA deposits of the bank increased 9% YoY
to Rs 28807 crore at end March 2023. The CASA ratio improved to 33.0% at end
March 2023 from 31.9% a quarter ago.
Loan growth eases: Advances growth was driven by retail loans
rising 4% YoY to Rs 30180 crore at end March 2023, while credit to MSME increased
10% to Rs 17674 crore at end March 2023. The corporate credit has moderated
sharply to 5% at Rs 12098 crore end March 2023.
Investment
book of the bank rose 6% YoY
to Rs 23326 crore at end March 2023. The AFS book jumped 14% to Rs 5598 crore, while
HTM book rose 4% to Rs 17727 crore at end March 2023. The duration of the
overall investment portfolio stood at 3.47 years end March 2023 compared with 3.89
years at end March 2022.
Margins improve: The bank has showed 47 bps YoY increase in cost
of deposits to 4.94%, while yield on advances surged 120 bps YoY to 9.80% in
Q4FY2023. Thus, the NIM has improved 62 bps YoY to 3.87%.
Branch expansion: The bank has added 16 branches and 11 ATMs in Q4FY2023,
taking overall tally to 901 branches and 1474 ATM`s end March 2023.
Book value of the bank stood at Rs 246.6 per share at end March 2023, while
the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 206.5
per share at end March 2023.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 25% increase in the interest
earned at Rs 1969.30 crore, while interest expenses increased 20% to Rs 1109.25
crore in Q4FY2023. NII improved 31% to Rs 860.05 crore in the quarter ended
March 2023.
Healthy growth in the core fee income: Bank has posted strong 20% growth in core fee
income to Rs 359 crore, while the treasury income rebounded to Rs 37 crore, supporting
54% surge in the overall non-interest income to Rs 395.24 crore in the quarter
ended March 2023.
Expenses ratio improves: The operating expenses of the bank increased 7% to
Rs 569.53 crore, as other expenses moved up 3% to Rs 225.75 crore, while
employee expenses gained 10% to Rs 343.78 crore in Q4FY2023. Cost to income
ratio dipped to 45.4% in Q4FY2023 compared with 58.4% in Q4FY2022, helping the
Operating Profit to increase 80% to Rs 685.76 crore.
Provisions and contingencies surge: The bank has showed 164% jumpe in provisions to
Rs 253.26 crore. The loan loss provisions zoomed 180% to Rs 328.82 crore, while
the bank has written back standard asset provisions of Rs 45.11 crore and other
provisions of Rs 20.47 crore.
Effective tax rate declined to 18.2% in Q4FY2023 from 54.1% in Q4FY2022. Net
Profit rose by 171% YoY to Rs 353.75 crore during quarter ended March 2023.
Financial Performance FY2023:
Bank has posted 132% increase in net profit to
Rs 1180.24 crore in the year ended March 2023 (FY2023). The net interest income
increased 28% to Rs 3185.10 crore, while non-interest income moved up 4% to Rs 992.58
crore, pushing up net total income by 21% to Rs 4177.68 crore in FY2023. The
operating expenses increased 9% to Rs 1969.45 crore, while provision and
contingencies declined 18% to Rs 767.19 crore, allowing profit before tax to
increase 107% to Rs 1441.04 crore in FY2023. The cost-to-income ratio improved
to 47.1% in FY2023 compared to 52.6% in FY2022. An effective tax rate declined
to 18.1% in FY2023 compared to 26.8% in FY2022. The net profit has increased 132%
to Rs 1180.24 crore in FY2023.
|
KarnatakaBank: Results
|
|
Particulars
|
2303 (3)
|
2203 (3)
|
Var %
|
2303 (12)
|
2203 (12)
|
Var %
|
|
Interest Earned
|
1969.30
|
1578.78
|
25
|
7220.23
|
6221.66
|
16
|
|
Interest Expended
|
1109.25
|
922.29
|
20
|
4035.13
|
3730.63
|
8
|
|
Net Interest Income
|
860.05
|
656.49
|
31
|
3185.10
|
2491.03
|
28
|
|
Other Income
|
395.24
|
256.90
|
54
|
992.58
|
953.88
|
4
|
|
Net Total Income
|
1255.29
|
913.39
|
37
|
4177.68
|
3444.91
|
21
|
|
Operating Expenses
|
569.53
|
533.27
|
7
|
1969.45
|
1810.91
|
9
|
|
Operating Profits
|
685.76
|
380.12
|
80
|
2208.23
|
1634.00
|
35
|
|
Provisions &
Contingencies
|
253.26
|
95.91
|
164
|
767.19
|
939.44
|
-18
|
|
Profit Before Tax
|
432.50
|
284.21
|
52
|
1441.04
|
694.56
|
107
|
|
Provision for tax
|
78.75
|
153.86
|
-49
|
260.80
|
185.94
|
40
|
|
PAT
|
353.75
|
130.35
|
171
|
1180.24
|
508.62
|
132
|
|
EPS*(Rs)
|
45.3
|
16.7
|
|
37.8
|
16.3
|
|
|
Adj BV (Rs)
|
206.5
|
155.8
|
|
206.5
|
155.8
|
|
|
* Annualized on current equity of
Rs 312.35 crore. Face Value: Rs 10, Figures in Rs crore
|
|
Source: Capitaline Corporate
Database
|
|