Karur Vysya Bank -
Q4 and FY 25 results and concall highlights -
Opened 50 branches in FY 25. Total branches now @ 888 vs 838 on 31 Mar 24. Top 7 states in terms of business for the bank are -
TN - 492 branches
AP - 148 branches
Telangana - 65 branches
Karnataka - 55 branches
Kerala - 21 branches
Maharashtra - 25 branches
NCR - 12 branches
Q4 outcomes -
NII - 1089 vs 998 cr, up 9 pc
Other income (Fee + Others) - 509 vs 469 cr, up 9 pc
Operating expenses - 764 vs 757 cr, up 1 pc
Operating profit - 835 vs 711 cr, up 17 pc
Provisions - 162 vs 137 cr, up 18 pc
PAT - 513 vs 436 cr, up 13 pc ( due higher tax outgo )
FY 25 outcomes -
NII - 4260 vs 3818 cr, up 12 pc
Other Income - 1829 vs 1501 cr, up 22 pc
Operating expenses - 2877 vs 2637 cr, up 9 pc
Operating profits - 3212 vs 2681 cr, up 20 pc
Provisions - 621 vs 581 cr
PAT - 1942 vs 1605 cr, up 21 pc
Period end ( 31 Mar 25 ) data -
Deposits @ 1.02 lakh cr, up 15 pc. CASA deposits @ 27.8 k cr, up 3 pc. CASA ratio @ 27.3 pc. Term deposits @ 74.2 k cr, up 20 pc
Advances @ 84.8 k cr, up 14 pc
Breakup of Advances -
Commercial banking ( loans < 25 cr ) - 30.7 k cr, up 21 pc. 61 pc of advances in this segment are < 5 cr
Retail banking - 20.8 k cr, up 18 pc. Witnessed aggressive growth in Gold loans ( @ 61 pc ), LAPs ( @ 34 pc ). Personal loans, Credit cards business de-grew
Agri banking - 20.8 k cr, up 20 pc. Out of these, 18.9 k cr have been lent against gold
Corporate banking ( loans > 25 cr ) - 12.04 k cr, down 14 pc YoY. Avg ticket size for the bank in this segment is 37 cr
Gross NPAs @ 0.76 vs 1.40 pc
Net NPAs @ 0.20 vs 0.40 pc
PCR @ 96.81 vs 94.85 pc
Massive improvement in Asset Quality
Yearly slippages @ 0.57 vs 0.67 pc of loan book ( commendable performance )
NIMs @ 4.09
RoE @ 16.28
Except for corporate banking, the advances ( Retail + Commercial + Agri ) grew by 20 pc - a key positive as these r high yielding segments
MFI loans constitute 0.37 pc of Bank’s loan book. Bank is waiting for stress in MFI portfolio to reduce before ramping up the MFI book
Unsecured loan book @ 2.3 pc of advances - far lower than peers. They can easily ramp it up by offering personal loans to selected customers
Cost of deposits @ 5.61 pc
Yeild on advances @ 10.15 pc
Yeild on investments @ 6.61 pc
Guiding for an advances growth of 2 pc above industry growth for FY 26
Will grow the corporate book again when the cost of funds moderate so as to generate satisfactory returns
Aim to maintain Credit :Deposit ratio @ around 85 pc levels
NIM expectation for FY 26 @ 3.7-3.75 as the bank feels that lending rates may fall sooner ( specially the EBLR lending ) than the deposit rates which may take 1-2 Qtrs to trend downwards ( due recent and expected rate cuts by RBI )
52 pc of bank’s lending is EBLR linked
Expecting 2 more rate cuts from RBI in FY 26
Retail + Agri + Commercial verticals will again have to do heavy lifting in FY 26 in order to ensure that the bank is able to do its total advances @ 12-14 pc ( since corporate book isn’t expected to grow in any meaningful way )
Will concentrate fresh branch openings in AP, Telangana, Karnataka, Maharashtra
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation