In This Article:
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Total Business: INR181,993 crores as of December 31, 2024.
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Advances: INR82,838 crores, 14% year-on-year growth, 3% quarterly growth.
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Deposits: INR99,155 crores, 3% growth.
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Retail Banking Growth: 20% year-on-year, driven by mortgages and jewel loans.
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Net Interest Margin (NIM): 4.03% for Q3, 4.09% for nine months.
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Operating Profit: INR815 crores, flat compared to the previous quarter.
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Return on Assets (ROA): 1.74% for the quarter.
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Gross NPA: 0.83%, expected to remain below 2%.
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Net NPA: 0.2%, targeted to stay below 1%.
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Cost-to-Income Ratio: 47.27%.
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CRAR Basel III: 15.91%.
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Branches Added: 25 branches in the current quarter, with plans for 22 more in Q4.
Release Date: January 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Karur Vysya Bank Ltd (BOM:590003) reported a strong quarter with consistent growth in key performance metrics such as growth, profitability, and asset quality.
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The bank's total business grew by 3% during the quarter, with advances and deposits both increasing by 3%.
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Retail banking saw a significant year-on-year growth of 20%, driven primarily by mortgages and jewel loans.
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The bank maintained a healthy Net Interest Margin (NIM) of 4.03% for the third quarter, despite a 10 basis point increase in the cost of deposits.
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Gross NPA has been reduced to 0.83%, and the bank aims to maintain it below 2%, reflecting strong asset quality management.
Negative Points
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Corporate loan book experienced a 2% decline during the quarter due to a cautious approach towards sectors with lower yields.
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Challenges persist in growing CASA balances, with a slight reduction of 0.23% sequentially.
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Operating profit remained flat at INR815 crores, indicating a lag in business growth relative to expenses on new initiatives.
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The bank's cost-to-income ratio is at 47.27%, with efforts ongoing to keep it below 50%, highlighting cost management challenges.
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The bank anticipates a moderated increase in the cost of deposits by 10 basis points in the next quarter, which could impact future margins.
Q & A Highlights
Q: Can you elaborate on the regulatory changes regarding gold loans and how they affect your business processes? A: The Reserve Bank of India has issued guidelines on gold loans, which we are fully compliant with. These include ensuring documentary evidence for the purpose of loans and stopping the rollover of loans. We have already implemented these changes, and they do not negatively impact our growth or customer acquisition.