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Karnataka Bank has reported 22% decline in net profit at Rs 274.24 crore
for the quarter ended March 2024 (Q4FY2024) on account of decline in margins
and high employee provisions. The bank has posted 3% decline in net interest
income (NII), while the non interest income of the bank improved 6% in
Q4FY2024. The Net Interest Margin (NIM) of the bank dipped to 3.30% in Q4FY2024
compared to 3.87% in the corresponding quarter of previous year.
On business front, the
bank as has posted 15% growth in business with strong 19% surge in loan book.
The asset quality of the bank was stable in Q4FY2024. Bank has raised the
credit to deposit ratio to 74.4% at end March 2024 from 70.2% at end March
2023. The CASA ratio of the bank has declined to 32.0% at end March 2024 from
33.0% at end March 2023.
Asset quality improves: The bank has maintained
stable asset quality in Q4FY2024.
The fresh slippages of
loans stood at Rs 527 crore in Q4FY2024 compared with 516 crore in previous
quarter and Rs 587 crore in the corresponding quarter last year.
The recoveries and upgradations
of NPAs stood at Rs 305 crore and the write-off of loans was at Rs 180 crore in
Q4FY2024.
The standard
restructured loan book of the bank stood at Rs 1342 crore end March 2024
compared to Rs 1561 crore a quarter ago.
Provision coverage ratio
was steady at 79.22% at end March 2024 compared to 80.75% a quarter ago and
80.86% a year ago.
The capital adequacy
ratio of the bank stood at 18.0% with Tier I ratio at 16.2% at end March 2024.
The risk weighted assets
of the bank has increased 17% YoY end March 2024,
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Asset Quality
Indicators: Karnataka Bank
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Mar-24
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Dec-23
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Sep-23
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Jun-23
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Mar-23
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Variation
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QoQ
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YoY
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Gross NPA (Rs Crore)
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2578.42
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2536.72
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2324.19
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2315.88
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2292.91
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2
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12
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Net NPA (Rs Crore)
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1129.18
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1060.06
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888.94
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877.71
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1021.27
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7
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11
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% Gross NPA
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3.53
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3.64
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3.47
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3.68
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3.74
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-11
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-21
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% Net NPA
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1.58
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1.55
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1.36
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1.43
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1.70
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3
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-12
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% PCR
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79.22
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80.75
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83.22
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83.47
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80.86
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-153
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-164
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% CRAR - Basel III
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18.00
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15.88
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16.20
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17.00
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17.45
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212
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55
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% CRAR - Tier I -
Basel III
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16.17
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13.66
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13.11
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13.80
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14.18
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251
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199
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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 15% YoY to Rs 171060 crore end March 2024, driven by 19% surge in
advances to Rs 73002 crore. Deposits rose 12% to Rs 98058 crore at end March
2024.
CASA deposits ratio
declines yoy, improves sequentially: The CASA deposits of the bank increased 9% YoY to Rs 31349 crore
at end March 2024. The CASA ratio declined to 32.0% at end March 2024 compared
to 33.0% at end March 2023, while rose from 31.5% a quarter ago. The term
deposits have increased 14% to Rs 66709 crore end March 2024.
Strong loan growth: Advances growth was
driven by retail loans rising 11% YoY to Rs 34311 crore at end March 2024,
while credit to MSME rose 5% to Rs 18981 crore at end March 2024. The corporate
credit jumped 59% to Rs 19711 crore end March 2024.
Investment book of the
bank rose 4% YoY to Rs 24302 crore at end March 2024.
Margins decline: The bank has showed 36
bps YoY jump in cost of deposits to 5.30%, while yield on advances increased 10
bps YoY to 9.90% in Q4FY2024. Thus, the NIM has dipped 57 bps YoY to 3.30%.
Branch expansion: The bank has added 21
branches and 22 ATMs in Q4FY2024, taking overall tally to 925 branches and 1504
ATM`s end March 2024.
Book value of the bank stood at Rs
274.2 per share at end March 2024, while the adjusted book value (net of NNPA
and 10% of restructured advances) was Rs 240.7 per share at end March 2024.
Quarterly Performance
NII declines as NIM dips:
Bank has recorded 12%
increase in the interest earned at Rs 2200.56 crore, while interest expenses surged
23% to Rs 1366.53 crore in Q4FY2024. NII fell 3% to Rs 834.03 crore in the
quarter ended March 2024.
Moderate rise in
non-interest income: Bank has posted 6% rise in the overall non-interest income to Rs
419.41 crore in the quarter ended March 2024.
Expenses ratio jumps: The operating expenses
of the bank increased 32% to Rs 753.65 crore, as other expenses moved up 40% to
Rs 316.85 crore, while employee expenses increased 27% to Rs 436.8 crore in
Q4FY2024. Cost to income ratio surged to 60.1% in Q4FY2024 compared with 45.4%
in Q4FY2023, causing the Operating Profit to decline 27% to Rs 499.79 crore.
Provisions and
contingencies decline: The bank has showed 27% decline in provisions to Rs 184.73 crore.
Effective tax rate
declined to 13.0% in Q4FY2024 from 18.2% in Q4FY2023. Net Profit fell 22% YoY
to Rs 274.24 crore during quarter ended March 2024.
Financial Performance
FY2024:
Bank has posted 11%
increase in net profit to Rs 1306.28 crore in the year ended March 2024
(FY2024). The net interest income increased 4% to Rs 3298.72 crore, while
non-interest income moved up 33% to Rs 1318.92 crore, pushing up net total
income by 11% to Rs 4617.64 crore in FY2024. The operating expenses increased
25% to Rs 2454.33 crore, while provision and contingencies declined 22% to Rs
600.58 crore, allowing profit before tax to increase 8% to Rs 1562.73 crore in
FY2024. The cost-to-income ratio improved to 53.2% in FY2024 compared to 47.1%
in FY2023. An effective tax rate declined to 16.4% in FY2024 compared to 18.1%
in FY2023. The net profit has increased 11% to Rs 1306.28 crore in FY2024.
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KarnatakaBank: Results
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Particulars
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2403 (3)
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2303 (3)
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Var %
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2403 (12)
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2303 (12)
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Var %
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Interest Earned
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2200.56
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1969.30
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12
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8298.50
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7220.23
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15
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Interest Expended
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1366.53
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1109.25
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23
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4999.78
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4035.13
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24
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Net Interest Income
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834.03
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860.05
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-3
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3298.72
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3185.10
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4
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Other Income
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419.41
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395.24
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6
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1318.92
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992.58
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33
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Net Total Income
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1253.44
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1255.29
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0
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4617.64
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4177.68
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11
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Operating Expenses
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753.65
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569.53
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32
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2454.33
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1969.45
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25
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Operating Profits
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499.79
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685.76
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-27
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2163.31
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2208.23
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-2
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Provisions &
Contingencies
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184.73
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253.26
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-27
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600.58
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767.19
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-22
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Profit Before Tax
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315.06
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432.50
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-27
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1562.73
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1441.04
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8
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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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PBT after EO
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315.06
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432.50
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-27
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1562.73
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1441.04
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8
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Provision for tax
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40.82
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78.75
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-48
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256.45
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260.80
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-2
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PAT
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274.24
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353.75
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-22
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1306.28
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1180.24
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11
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EPS*(Rs)
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29.08
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37.51
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34.63
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31.29
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Adj BV (Rs)
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240.70
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206.53
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240.70
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206.53
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* Annualized on current equity of
Rs 377.25 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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