Karur Vysya Bank

Karur Vysya Bank –

Q3 concall highlights –

Advances up 17 pc @ 72.6k cr

Deposits up 13 pc @ 85.6k cr

CASA up 5 pc @ 27k cr

NIMs @ 4.2 pc, up 9 bps YoY

GNPAs – 1.58 pc ( down 112 bps !!! )

NNPAs – 0.42 pc ( down 48 bps !!! )

PCR – 95 pc, up 394 bps !!!

RoA @ 1.65 vs 1.32 pc

RoE @ 17.2 vs 14.1 pc

NII – 1001 vs 890 cr, up 13 pc

Other income – 358 vs 317 cr, up 13 pc

Op Profit – 676 vs 690 cr ( down 2 pc )

Provisions – 149 vs 364 cr ( down sharply )

Net Profit @ 412 vs 290 cr ( up 42 pc !!! )

Segment wise growth in advances –

Retail up 21 pc @ 17k cr

Commercial up 20 pc @ 24k cr

Agri up 19 pc @ 17k cr

Corporate up 6 pc @ 14k cr ( deliberate strategy by the bank to keep low margin business’s growth at moderate levels )

Fresh slippages @ 197 cr ( well within limits )

Bank is holding total provisions of 822 cr against Net NPAs of 305 cr !!!

Total bank branches @ 831 vs 790 LY. To open 8 new branches in Q4

Expecting to maintain NIMs of > 4 pc in Q4 as well

Confident of keeping the slippage ratios under 1 pc

Std restructured book @ 1.09 pc of advances. Holding 28 pc provisions against the std restructured book

Bank has a BNPL arrangement with Amazon. The book is growing well and credit costs are low

Demand from MSMEs continues to be very strong. Seeing good demand in Q4 as well. MSME book is now 33 pc of bank’s total book

Bank is going slow wrt loan disbursements to large corporates as the yields there r low and the bank believes that they can get better yields elsewhere

If the textile industry picks up, it should be positive for the bank as TN has a vibrant textile industry. Signing of UK, Switzerland FTA should also be a positive

Banking is going to increase its focus on retail home loans and builder loans over the next 2-3 yrs. This has been identified as a core growth area for the future

Going to expand slowly into the MFI segment as well (by tying up with various partners)

Disc : holding, not SEBI registered, biased