But the banks that qualify based on these criteria (only HDFC bank, Indusind, kotak have higher RoE, NIM and lesser NNPA of 1) are trading at 3-4.5 times Book value… Indian bank is also one that comes close.
Yes. Only few banks meet this criteria and they are trading at hefty valuations. Most of the times the valuation given by market is right. If ktk bank is trading at this very low valuation of 0.7 P/B, it is for right reason. The banks you mentioned are run by very admired individuals who have proven themselves with respect to sustainable consistent and quality growth. Their capital allocation skills are also proven (successful investments into non banking divisions). They always focus on risk mitigation, which is proven from their NPA track record.
Ktk bank is 100yr old bank which has managed to survive and grow at not so good pace. NPA track record is better than only PSUs. Until unless it shows that it can grow at good pace and bring down the NPAs as well as those big quantity “would be” NPA numbers under control, the bank won’t get re-rated. As the macro economic conditions improve, with the management showing intent to grow, good days might be ahead. We need to keep close track of those NPA numbers and restructured etc accounts.
This quarter, the bank might even post a loss due to Nirav Modi issue. We’ll need to watch what comes out. I have a feeling that most private banks especially the large ones except hdfc and kotak are managing the books and npa. The real npa numbers are way higher.
Results out but nothing found regarding Gitanjali gems issue loss whether booked or not , members are requested to focus light on Gitanjali gems issue and further noticeable points
Yes. There is no mention of how much % of provisions were made towards that fraud.
It would have been surely recognized as NPA. The only question would be whether 100% provision is made or not.
The worst part of the results is 60-70% NPA divergence and there is no comment on it in the press release. With 2016 audit revealing 0% divergence and 2017 audit huge divergence, it makes no sense.
Other negatives that I noticed
Deposit growth was only 10.8% bank has been able to achieve credit growth of over 20% through significant improvement CD ratio. So there is limited scope for the bank to leverage this further.CASA ratio is down. Capital adequacy is down if this continues there will be another round of equity dilution
Q4 concall details anyone? Have they conducted it or any date given?
The latest SHP suggest that Vijay Kedia’s holding has dropped below 1%. His name does not feature in the list of top Sh.
Vijay kedia looks to have exited Karnataka Bank and he reduced his position in Aries Agro.
Karnataka banks management has been consistently missing guidance. They had guided for 2% NNPA by the end of FY18. That did not happen.
They said we have a 2020 vision and then scrapped it. Now they are talking of 1234 plan.
So the goal posts keep changing and the management keeps selling dreams on their concalls. As soon as their npa divergences came up at least for me trust in the management is non existent. Lesson learnt
Disclosure- exited after npa divergences increasing last quarter.
Excellent results and a definate candidate for re rating
I saw that the gnpa is still high. Capital adequacy ratio lowest in the last few quarters maybe. Overall results feel good
Disc invIested
Fall in Capital adequacy ratio is leading to equity dilution. The price will adjust accordingly.
Disc : not invested, watching
SBI says that jet airways account is stressed asset , so does Karnataka bank has also exposure towards jet airways?
Can anyone tell the Quantum of exposure of Karnataka bank towards il&fs
156 cr (0.31% of total advances) Some 32 cr is part of sma2. Remaining is standard. No provisions made so far for ilfs debt.
Disl: invested
In my view, public shareholders should voice their views on passing a resolution for getting it acquired by large banks like HDFC, Kotak, etc. It will unlock value for all the stakeholders involved.
Apart from 156 cr loan they have ~25cr investment exposure too towards IL&FS according to the above research report.
Discl: Invested
The management is not replying to the investors query. It is a strong mismanagement in their part. I would request how can I escalate this issue? @hitesh2710 @ayushmit
Could we escalate to SEBI?