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Karur Vysya Bank has posted healthy 58% growth in the net profit to Rs 217.56 crore in the quarter ended March 2017 (Q4FY2017). Net Interest Income (NII) surged 23%, while non-interest income jumped 40% in Q4FY2017. Bank has recorded further improvement in NIMs to robust level of 4.04% in Q4FY2017 from 3.68% in the previous quarter and 3.55% in the corresponding quarter last year. Bank also exhibited strong improvement in expenses ratio to 37.6% in Q4FY2017 from 48.9% in Q4FY2016. Bank has also improved CASA ratio to 27.7% at end March 2017. However, the bank showed moderation in business growth, while asset quality also deteriorated in Q4FY2017.
Asset quality weakens: Bank has exhibited deterioration in asset quality in the quarter ended March 2017 with higher fresh slippages of advances.
- GNPA ratio rose 92 bps on qoq basis to 3.58%, while NNPA ratio inched up 85 bps qoq to 2.53% ay end March 2017.
- The fresh slippages of loans increased to Rs 559.82 crore in Q4FY2017 from Rs 243.33 crore in Q3FY2017. The NPA reductions from recoveries, upgrades and write-offs was lower at Rs 98.25 crore in Q4FY2017, allowing surges in Gross NPAs of the bank.
- Fresh restructuring of advances was nil in Q4FY2017. Outstanding standard restructured advances of the bank dipped to Rs 842 crore (2.0% of advances) at end March 2017 compared to Rs 1355 crore (3.4% of advances) at end March 2016.
- The bank's exposure to SDR scheme stands at Rs 104.64 crore, 5/25 refinancing scheme Rs 76.78 crore and S4A scheme Rs 54.1 crore end March 2017.
- The provision coverage ratio declined to 57.8% at end March 2017, compared with 67.06% a quarter ago and 82.46% a year ago.
| Asset Quality Indicators: Karur Vysya Bank |
|
1703 |
1612 |
1609 |
1606 |
1603 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
1483.81 |
1022.24 |
902.74 |
702.35 |
511.18 |
45 |
190 |
| Net NPA (Rs Crore) |
1033.46 |
637.52 |
565.14 |
306.17 |
216.17 |
62 |
378 |
| % Gross NPA |
3.58 |
2.66 |
2.29 |
1.79 |
1.30 |
92 |
228 |
| % Net NPA |
2.53 |
1.68 |
1.44 |
0.79 |
0.55 |
85 |
198 |
| % Provision Coverage Ratio |
57.83 |
67.06 |
68.26 |
78.49 |
82.46 |
-923 |
-2463 |
| % CRAR - Basel III |
12.54 |
11.79 |
11.44 |
11.67 |
12.17 |
75 |
37 |
| % CRAR - Basel III - Tier I |
11.85 |
11.05 |
10.67 |
10.86 |
11.26 |
80 |
59 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Performance:
Business growth moderates: Business of the bank increased at moderated pace of 6% yoy to Rs 95135 crore at end March 2017. Deposits increased 7% to Rs 53700 crore, while advances moved up 5% to Rs 41435 crore at end March 2017 over March 2016. Credit-deposit ratio eased to 77.2% at end March 2017 from 78.8% at end March 2016.
CASA ratio continues to improve: CASA deposits increased 28% to Rs 14889 crore. CASA ratio improved to 27.7% at end March 2017 from 23.3% a year ago.
Commercial loans share rising: commercial loans improved 14% to Rs 14504 crore at end March 2017 driving the overall advances growth, while the retail loans increased 7% to Rs 6340 crore. However, the corporate loan declined 1% at Rs 13612 crore and agriculture loans also fell 1% to Rs 6979 crore.
NIMs improving: Bank has recorded healthy improvement in NIMs to 4.04% in Q4FY2017 from 3.68% in the previous quarter and 3.55% in the corresponding quarter last year. An improvement in CASA ratio mainly supported NIMs rise in Q4FY2017. The yield on advances declined 8 bps yoy to 11.23% in Q4FY2017, while cost of funds dipped 85 bps yoy to 6.03% contributing to the NIM improvement.
Network expansion: Bank has opened 5 branches in the quarter ended March 2017. Bank has the network of 711 branches and 1747 ATMs at end March 2017.
Book value stood at Rs 82.6 per share at end March 2017, while adjusted book value (excluding NNPA and 10% of restructured assets) was at Rs 64.3 per share at end March 2017.
Quarterly Performance
NII jumps, as NIMs improve: For the quarter ended March 2017, the bank has posted 5% growth in interest income Rs 1433.24 crore, while interest expenses declined 5% to Rs 853.25 crore. NII jumped 23% to Rs 579.99 crore, supported by further improvement in NIMs.
Non-interest income spurts: The non-interest income of the bank zoomed 40% to Rs 231.99 crore in Q4FY2017. The core fee income was flat at Rs 155 crore, while treasury income zoomed 609% to Rs 78 crore in Q4FY2017.
Net Total income moved up 27% to Rs 811.98 crore in quarter under review.
Cost-to-income ratio improves: Operating expenses declined 2% to Rs 304.92 crore. The employee cost fell 1% to Rs 137.99 crore in Q4FY2017, while the other operating expenses dipped 4% to Rs 166.93 crore. Expense ratio improved sharply to 37.6% in Q4FY2017 from 48.9% in Q4FY2016, allowing the operating profit to gallop 55% to Rs 507.06 crore in the quarter ended March 2017.
Provisions rises: Provisions and contingencies increased 295% to Rs 217.50 crore in Q4FY2017 as against Rs 55.01 crore in the corresponding quarter last year. NPA provisions jumped 76% to Rs 204 crore, while investment provisions stood at Rs 19 crore in Q4FY2017.
The Profit before tax (PBT) increased 7% to Rs 289.56 crore in Q4FY2017 from Rs 271.50 crore Q4FY2016.
Tax provision dips: Banks tax provisions stood at Rs 72.00 crore in Q4FY2017 against mere Rs 133.50 crore in Q4FY2016. The net profit increased 58% to Rs 217.56 crore in Q4FY2017.
Annual Financial Performance:
For the year ended March 2017 (FY2017), the bank has posted 7% growth in net profit to Rs 605.98 crore. The net interest income improved 16% to Rs 2073.70 crore, while non-interest income moved up 11% to Rs 782.22 crore in FY2017. The expense ratio improved by 264 bps to 45.0% in FY2017 compared to 47.6% in FY2016. The operating expenses increased 8% to Rs 1284.95 crore, while provision and contingencies moved up 76% to Rs 687.50 crore. The profit before tax declined 3% to Rs 883.47 crore in FY2017. Tax provisions eased to Rs 277.49 crore in FY2017 against Rs 344.00 crore in FY2016. Net profit increased 7% to Rs 605.98 crore in FY2017.
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