Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q3 FY24 Earnings Presentation
39 slides from Karnataka Bank's earnings presentation, Jan 23, 2024
Slide 1: Exchange filing cover letter for analyst presentation
Karnataka Bank Ltd. Your Family Bank, Across India Regd. & Head Office Phone : 0824-2228222 P. B. No.599, Mahaveera Circle E-Mail : investor.grievance@ktkbank.com Kankanady Website : www.karnatakabank.com Mangaluru – 575 002 CIN : L85110KA1924PLC001128 SECRETARIAL DEPARTMENT 23.01.2024 HO: SEC:302:2
Slide 2: Investor Presentation Q3 FY24
INVESTOR PRESENTATION Q3 FY24 Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 3: Table of Contents
01 Independent Board and Experienced Management Team 02 Accelerating our Transformation Journey 03 Strategic Roadmap Table of Contents 04 Our Strengths 05 Financial Highlights
Slide 4: Experienced Management Team
Experienced Management Team… Srikrishnan H Sekhar Rao Balachandra Y V MD & CEO Executive Director Chief Operating Officer Former MD & CEO, Jio Payments Former COO, CSB Bank; National 28-years operations veteran at Bank; ED, Yes Bank; Founding Head, RBL; Co-Founder, Savvy Karnataka Bank Team, HDFC Ba
Slide 5: Guided by an Independent Board
…Guided by an Independent Board With no shareholder holding >5% share capital in the Bank P Pradeep Kumar Keshav Krishnarao Desai Balakrishna Alse S Part Time Chairman, Independent Director Independent Director Independent Director Managing Partner, Desai Group Former ED, Oriental Bank of Former MD,
Slide 6: Banking with a Legacy, Embracing the Future
Banking with a Legacy, Embracing the Future Foster cultural shift to business and sales orientation Benchmark product development with market Digitization & automation at all levels Enhance operational and cost efficiencies Focus on Simplify and digitize processes Core Bank Centralize op
Slide 7: Accelerating our Transformational Journey
Accelerating our Transformational Journey Q3FY24 Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 8: Key Milestones During the Quarter: Capital for Growth
Key Milestones During the Quarter Capital for Growth Board of Directors at its Meeting held on 22-Sept-23 had approved Total Capital Raise to raise equity capital for up to an amount of INR 1,500 crore Preferential issue of Equity shares successfully completed Tranche 1 – INR 800 Cr. Backed by
Slide 9: Key Milestones During the Quarter: Partnerships
Key Milestones During the Quarter Partnerships Satin Clix Capital DigiVriddhi HDFC Life Bajaj Allianz Life CreditCare Digital co-lending Tailored financial Financial support to Offer comprehensive Offer varied life partnership through services to dairy women in rural & financial solutions
Slide 10: Key Milestones During the Quarter: Products
Key Milestones During the Quarter Products Launched collections of KBL Commercial Vehicle KBL Direct – Bill Pay Live with CRM Direct Taxes Financing Platform facilitates collection of Provide loans to finance both new Launched Bharat Bill payment Integration of customer data and Direct Taxes
Slide 11: Key Milestones During the Quarter: Process
Key Milestones During the Quarter Process CASA Balance Build up Home Loan Propensity Increase CASA deposits to drive Target potential home loan customers cost-effective funding with tailored promotions and personalized offers Collection Prioritisation Primary Bank Index Optimise collection efforts t
Slide 12: Key Milestones During the Quarter: Technology
Key Milestones During the Quarter Technology Cloud Data Platform for ACoE Integrated Risk and Finance framework to support Bank’s regulatory/ management reporting under implementation in OFSAA Scalable and configurable No-Code, Low-Code platform for business account New business website along with A
Slide 13: Strategic Roadmap
Strategic Roadmap “Start-up @ 100” Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 14: Strategic Roadmap
Strategic Roadmap Creating a Digitalisation and A Performance-Driven C Partnership to Culture Accelerate Book Growth Delivering Excellence in Strengthening Financial Core Businesses with Position to Create Underlying Technology Long-Term Value Digital First private sector Rebuild Outward-Facing, Pla
Slide 15: Driving Excellence in Proven Core Competencies
Driving Excellence in Proven Core Competencies A. Consistent Emphasis on our Strength Areas Our Legacy Building on Our Legacy Tradition with Innovation 13 Mn 1 in 401 Outbound Sales Culture Indians bank with 100 Year Legacy Happy customers us Startup-like Agility 35.4%2 46.3% Capitalise on c
Slide 16: Driving Excellence in Proven Core Competencies
Driving Excellence in Proven Core Competencies A. Continued Transition Towards Retail Outbound Sales Team and “Feet on Street” for Inducted ~250 Sales Officers and ~400 Feet on growing liabilities and expanding home loan book Ground for covering key markets and target segments 14 Regional Offices re
Slide 17: Creating a Performance Driven Culture
Creating a Performance Driven Culture B. Rebuild Outward-Facing, Business-Centric Teams New Management Experienced in driving transformation Customer- centric Model Outbound, business-oriented sales force Cross- Functional Capabilities Branch ability to underwrite Assets and originate Liabilities Di
Slide 18: Strengthen Financial Position to Drive Profitability
Strengthen Financial Position to Drive Profitability C. Prioritise Retail and Government Accounts with Sustained Growth in Other Segments Key Capabilities in Place to Leverage Opportunities in the Government Business Empaneled as 'Agency Bank’ for direct tax collection Integrated on National Jan Sam
Slide 19: Targeted Performance Improvement to Boost Returns
Strengthen Financial Position to Drive Profitability C. Targeted Performance Improvement to Boost Returns Cost to Income %: 47.0% - 49.0% Manage Operating Expenses NNPA: 1.0% - 1.5% Enhance Asset Quality ROA %: CASA %: 33.0% - 35.0% 1.2% - 1.4% Effective Capital Allocation Stable Source of Funding N
Slide 20: Digitalisation Propelling Robust Book Growth
Digitalisation Propelling Robust Book Growth D. Foundation in place to Drive Next Leg of Digital Innovation State-of-the-art ‘Technology, Digital ‘Project KBL-VIKAAS’ to drive & Product Hub’ at Bengaluru transformation initiatives advised by 40,000 sq. ft. super built-up area Boston Consulting G
Slide 21: Moving Towards a Digital-First Bank
Digitalisation Propelling Robust Book Growth D. Moving Towards a Digital-First Bank Embedding data & analytics in business processes to drive data-driven decision making… Predictive, business/strategy & descriptive P Predict & Prioritise Data Link to enable seamless communication analytics use-cases
Slide 22: Digital First, New-Age Private Sector Bank Driven by Fintech Partnerships
Digitalisation Propelling Robust Book Growth D. Digital First, New-Age Private Sector Bank Driven by Fintech Partnerships Co-branded General, Health Co-Lending Credit Cards and Life Insurance Crossed the milestone of Tie-up with reputed NBFC and Partnered with two new Life 3 lakhs cards with SBI; MF
Slide 23: Our Strengths
Karnataka Bank Our Strengths Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 24: Key Strengths
Key Strengths Key Highlights Strong governance 100 years of legacy culture and an delivering consistent Strong geographical Superior customer experienced profit and dividend footprint service and retention management team Diversified offerings with Healthy asset quality and Digital & technological e
Slide 25: Diversified Offerings With Established Brand Equity
Diversified Offerings With Established Brand Equity Product & Services for Everyone Retail and Personal Banking MSME Agriculture Banking Housing Working capital finance for traders & Agriculture & allied activities Vehicle manufacturing industries Farm development Gold Term loans & inf
Slide 26: Strong Geographical Footprint
Strong Geographical Footprint A Trusted Brand Identity Steady Growth in Locations Served 1,445 1,474 1,480 1,482 877 901 903 904 7 4 2 8 21 1 9 10 2 1 Mar-22 Mar-23 Sep-23 Dec-23 Branches ATM & Recyclers 3 16 7 20 5 8 Presence Across All Tiers 53 26 Rural Metro Top 5 States 23.0% 27.8% 7 43 Karnatak
Slide 27: Expanding Customer Connect & Footprint
Expanding Customer Connect & Footprint Creating a Pan-India Brand Expanding Customer Connect… …and Geographical Footprint Customer/ NRI/ HNI Meets conducted in Branch & e-lobby Opening in Ayodhya all key metros and regions leading to Inauguration ceremony was graced by Shri Champath Rai, Mega event
Slide 28: Financial Highlights
Karnataka Bank Financial Highlights Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 29: Karnataka Bank at a Glance (9M Results)
Financial Highlights Karnataka Bank at a Glance (9M Results) Particulars 9MFY24 9MFY23 Growth Y-o-Y Total Assets 109,990 99,572 10.5% Gross Advances/(% Retail) 69,741 / (47.50%) 63,673 / (48.08%) 9.5% / (58 bps) Deposits 92,195 84,597 9.0% Retail Deposits 63,176 57,211 10.4% CASA Ratio 31.45% 31.91%
Slide 30: Karnataka Bank at a Glance (Quarterly Results)
Financial Highlights Karnataka Bank at a Glance (Quarterly Results) Particulars Q3FY24 Q2FY24 Growth Q-o-Q Q3FY23 Growth Y-o-Y Total Assets 109,990 105,856 3.9% 99,572 10.5% Gross Advances/(% Retail) 69,741 / (47.50%) 66,936 / (48.89%) 4.2% / (139 bps) 63,673 / (48.08%) 9.5% / (58 bps) Deposits 92,1
Slide 31: Liability Profile
Liability Profile Deposit Profile (in INR Cr) Retail Term Deposit Breakup (Dec-23) 92,195 Above 5 cr 87,368 2 cr to 5 cr 84,597 5.5% 75,655 80,387 4.1% 68,452 71,785 62,871 67% 69% 67% 68% 71% 69% 67% 70% 28% 28% 29% 32% 33% 33% 32% 31% 5% 2% Below 2 cr FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 90
Slide 32: Advances
Advances Net Advances Profile (in INR Cr) 68,216 56,783 59,952 62,532 54,828 56,964 51,516 20.4% 26.0% 47,252 20.2% 29.0% 30.3% 25.8% 13.2% 27.3% 31.7% 29.5% 26.5% 33.8% 22.9% 28.7% 26.9% 27.6% 53.0% 57.8% 50.3% 48.1% 47.5% 45.1% 42.9% 45.5% FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 Retail Mid cor
Slide 33: Asset Quality
Asset Quality GNPA & NNPA Provision Coverage (Incl. & excl. TWO) 4.9% 4.8% 4.9% 80.9% 80.2% 80.8% 4.4% 73.5% 3.9% 70.0% 3.7% 3.6% 64.7% 3.3% 54.6% 58.5% 55.5% 58.2% 50.1% 37.3% 36.6% 38.8% 3.0% 3.0% 3.1% 3.2% 31.5% 2.4% 41.1% 1.7% 1.7% 1.6% FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 FY18 FY19 FY20
Slide 34: Asset Quality: Restructured Portfolio
Asset Quality Restructured Portfolio Standard Restructured Portfolio – Movement Standard Restructured Portfolio – Break-up Particulars (INR Cr) Q3FY24 Personal Loans 3.1% Others Opening balance 2,214 Agriculture 0.5% 2.6% CRE 4.1% Fresh restructuring during the period 5 MSME 29.7% Increase in balanc
Slide 35: Profitability
Profitability Operating Revenue (INR Cr.) Other Income¹ (INR Cr.) 1,399 1,300 326 993 4,178 954 1,002 378 954 3,678 299 900 3,445 3,364 597 3,292 545 322 193 2,812 2,907 2,922 414 283 194 92 96 246 178 183 172 412 416 561 416 432 356 (30) (151) (190) FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 FY18
Slide 36: Profitability
Profitability Net Interest Margin Cost to Income ratio 3.7% 3.6% 3.6% 52.6% 3.2% 3.2% 2.9% 50.1% 49.7% 2.8% 2.9% 47.6% 47.9% 50.6% 47.1% 45.7% FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 Return on Equity Return on Assets 1.3% 15.4% 14.7% 15.2% 1.2% 1.1% 8.
Slide 37: Key Ratios
Key Ratios CRAR RWA/Total Assets 17.4% 15.7% 15.1% 15.9% 14.9% 13.2% 63.9% 60.6% 63.3% 12.0% 12.7% 58.1% 56.6% 55.8% 53.9% 54.4% FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 FY18 FY19 FY20 FY21 FY22 FY23 9MFY23 9MFY24 LCR Credit Cost % 2.3% 2.4% 308.4% 311.6% 268.6% 280.0% 266.0% 246.6% 215.5% 1.5% 1
Slide 38: Shareholder Value
Shareholder Value Shareholding Pattern (Dec-23) EPS & Market Capitalisation Foreign 45.0 Institutions 42.7 19.0% 10,000 40.0 37.9 8,116 35.0 8,000 30.0 6,000 25.0 3,777 20.0 Domestic 4,000 15.5 16.4 4,238 Indian Public 3,247 15.4 15.0 Institutions 13.9 57.2% 11.5 17.7% 10.0 2,000 1,899 1,725 5.0 Bod
Slide 39: Disclaimer
Disclaimer This presentation has been prepared by Karnataka Bank (the “Bank”) solely for providing information about the Bank. This presentation is confidential and may not be copied or disseminated, in whole or part, in any manner. This presentation has been prepared by the Bank based on informatio