Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q1 FY25 Earnings Presentation
41 slides from Karnataka Bank's earnings presentation, Jul 24, 2024
Slide 1: Submission of presentation to stock exchanges for Q1 FY25 results
Karnataka Bank Ltd. Your Family Bank, Across India Regd. & Head Office Phone : 0824-2228222 P. B. No.599, Mahaveera Circle E-Mail : Comsec@ktkbank.com Kankanady Website : www.karnatakabank.com Mangaluru – 575 002 CIN : L85110KA1924PLC001128 SECRETARIAL DEPARTMENT 24.07.2024 HO:SEC:102:2024-25 To: 1.
Slide 2: Investor Presentation Q1 FY25
INVESTOR PRESENTATION Q1 FY25 Banking with Legacy, 100 Years of Trust & Excellence Embracing the Future
Slide 3: Table of Contents
Table of Contents Independent Board and 01 Experienced Management Team 02 Financial Highlights Accelerating our Transformation 03 Journey 04 Our Strengths and Strategies
Slide 4: Key Achievements During Q1 FY25
Key Achievements During Q1 FY25 Beginning of transformative steps leading to improved financial position… Deposits and Advances Growth NII and NIM Stakeholder Value GNPA and NNPA Gross Advances1 INR cr. Within guidance 24.4% 40.8% 3.30% 3.54% 25.0% 37.8% Growth: 14.45% 3.53% 3.54% Q4FY24 3.4% Q1FY25
Slide 5: Q1 FY25 Performance at a Glance
Q1 FY25 Performance at a Glance Gross Advances / Retail Advances Deposits CASA Assets 75,455 / 35,313 100,164 30.54% 3.4% QoQ 3.8% QoQ 2.1% QoQ 143 bps QoQ NIM PAT ROA / ROE Profitability 3.54% 400 1.38% / 14.45% 24 bps QoQ 46.0% QoQ 42 bps QoQ 381 bps QoQ GNPA and Standard Restructured % of NNPA PC
Slide 6: Q1 FY25 Performance at a Glance
Q1 FY25 Performance at a Glance Profitability NII improved by 10.9% YoY on the back of increase in Interest Income to INR 2,278 Cr in Q1 FY25 NIM improved by 24 bps QoQ to 3.54% in Q1 FY25, decreased 14 bps YoY PAT improved by 46.0 % QoQ and 8% YoY reaching INR 400 Cr As a result, ROA and RO
Slide 7: Experienced Management Team
Experienced Management Team… Strengthening of Management, making the Organization Future Ready Srikrishnan H Sekhar Rao Abhishek Sankar Bagchi MD & CEO Executive Director Chief Financial Officer Former MD & CEO, Jio Payments Former COO, CSB Bank; National Former CFO, NSDL Payments Bank; Bank; ED, Ye
Slide 8: Guided by an Independent Board
…Guided by an Independent Board With no Shareholder Holding >5% Share Capital in the Bank P Pradeep Kumar Justice A V Chandrashekar Kalmanje Gururaj Acharya Part Time Chairman, Independent Independent Director Independent Director Director Former Judge, High Court of Senior Partner, M/s. K G Acharya
Slide 9: Banking with a Legacy, Embracing the Future
Banking with a Legacy, Embracing the Future What we have achieved What we plan to do Record capital raise of INR 1,500 cr. within 6 months Best in class Digital Banking experience, extending Institutional holding reached ~42% in FY24 from ~26% our reach across all corners of the country in FY23 Prom
Slide 10: Financial Highlights
Financial Highlights Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 11: Karnataka Bank at a Glance
Financial Highlights Karnataka Bank at a Glance Particulars Q1FY25 Q4FY24 Growth Q-o-Q Q1FY24 Growth Y-o-Y Business Turnover 175,619 171,059 2.7% 149,971 17.1% Gross Advances / % Retail 75,455 / 46.8% 73,002 / 46.6% 3.4% / 22bps 63,012 / 50.7% 19.7% / (385bps) Deposits 100,164 98,058 2.1% 86,960 15.
Slide 12: Karnataka Bank at a Glance
Financial Highlights Karnataka Bank at a Glance Particulars Q1FY25 Q4FY24 Growth Q-o-Q Q1FY24 Growth Y-o-Y Fee Income or Commission Income 226 293 (22.8%) 229 (1.3%) Non-interest Income / Total Income 275 / 2,557 389 / 2,620 (29.2%) / (2.4%) 273 / 2,283 0.8% / 12.0% Credit Cost 0.11% 0.20% (9bps) 0.
Slide 13: Profitability
Profitability Operating Revenue (INR Cr.) Other Income (INR Cr.) 4,618 4,178 419 Other income in Q1FY25 is 3,445 not directly comparable to 324 326 94 40 32 279 previous quarters owing to 250 81 54 47 changes in accounting 62 44 6 policy with respect to 293 1,139 1,154 1,253 1,182 229 226 Investment
Slide 14: Profitability
Profitability Net Interest Margin Non-Interest Income to Total Income 13.99 14.83% % 14.07% 12.53% 3.70% 3.68% 11.96% 11.35% 3.58% 3.51% 3.46% 3.54% 3.30% 11.70% 3.20% 10.76% FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Return on Equit
Slide 15: Liability Profile
Liability Profile Deposit Profile (INR Cr.) 98,058 98,058 100,164 89,532 92,195 87,368 86,960 80,387 25,167 25,167 24,918 23,402 23,910 23,491 23,078 5,671 21,673 6,181 6,181 5,168 5,084 5,316 4,919 4,827 66,710 63,201 66,710 69,575 53,887 58,561 58,963 60,962 FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24
Slide 16: Advances
Advances Gross Advances Profile (INR Cr.) Sectoral Loan Exposure 14.6% 14.9% Others Housing 11.3% 75,455 14.5% 73,002 73,002 Large Enterprises 69,741 Agriculture 66,936 6.7% 63,012 Other Personal 61,303 29% 28% 28% Loans 57,769 27% 3.5% 25% 19.7% 20% 21% Infra 14.8% 20% MSME NBFC 26% 26% 24% 28% 26%
Slide 17: Asset Quality
Asset Quality GNPA & NNPA Provision Coverage (Incl. & excl. TWO) 80.86% 79.22% 83.47% 83.22% 80.75% 79.22% 3.90% 3.74% 77.97% 3.53% 73.50% 3.68% 3.47% 3.64% 3.53% 3.54% 62.10% 61.75% 58.21% 55.50% 56.20% 56.21% 53.97% 2.42% 38.80% 1.70% 1.58% 1.43% 1.55% 1.58% 1.66% 1.36% FY22 FY23 FY24 Q1 FY24 Q2 F
Slide 18: Asset Quality
Asset Quality Restructured Portfolio GNPA & Restructured Assets (INR Cr.) Standard Restructured Portfolio – Break-up 11.0% 7.9% 5.7% 7.7% 6.8% 6.3% 5.7% 5.4% 5.3% 15.0% 6,366 Others Personal Loans 2.8% 2,251 4,864 4,850 26.6% 4,538 4,374 Agriculture 4,157 4,157 4,063 MSME 4.4% CRE 2,293 2,316 2,324
Slide 19: Asset Quality
Asset Quality Movement of NPA Quarterly Annual Particular (INR Cr.) Q1 FY25 Q4 FY24 Q1 FY24 FY24 Opening Gross NPA 2,578.42 2,536.72 2,292.91 2,292.91 Additions 416.49 527.58 292.89 1,650.20 Sub Total ( A ) 2,994.91 3,064.30 2,585.80 3,943.11 Slippage ratio 0.59 0.79 0.50 2.80 Reduction Up-gradation
Slide 20: Efficiency Ratio
Efficiency Ratio Cost to Income Ratio 52.6% 53.2% 60.1% 47.1% 53.2% 52.8% 51.3% 47.2% FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Business per Employee (INR Cr.) Staff Cost (INR Cr.) 20 1,373 * 19 19 19 1,015 1,069 18 17 17 437 293 307 336 320 16 FY22 FY23 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4
Slide 21: Key Ratios
Key Ratios Capital Adequacy Ratio Risk Weighted Assets (INR Cr.) 56.6% 53.9% 53.9% 55.4% 54.7% 55.8% 53.9% 54.9% 17.5% 18.0% 18.0% 17.6% 17.0% 16.2% 15.7% 1.8% 15.9% 1.8% 1.7% 62,533 61,351 62,533 63,554 3.3% 3.2% 54,889 57,865 3.1% 2.2% 51,837 53,378 3.0% 16.2% 16.2% 15.9% 12.7% 14.2% 13.8% 13.1% 1
Slide 22: Shareholder Value
Shareholder Value Shareholding Pattern EPS & Market Capitalisation (INR Cr.) 45.0 42.4 * 10,000 39.8 40.0 37.9 8,455 Others Foreign 35.0 0.4% Institutions 8,000 7,897 14.7% 30.0 6,000 25.0 Domestic Institutions 20.0 Indian 22.9% Public 4,000 15.5 4,238 15.0 56.0% 13.9 Body 1,899 Corporate 9.8 10.0 N
Slide 23: Accelerating our Transformation Journey
Accelerating our Transformation Journey Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 24: Targeted Performance Improvement to Boost Returns
Targeted Performance Improvement to Boost Returns Cost to Income %: 50.0% - 52.0% Manage Operating Expenses NNPA: 1.0% - 1.5% Enhance Asset Quality ROA %: CASA %: 1.2% - 1.4% 30.0% - 32.0% Effective Capital Allocation Stable Source of Funding NIM %: 3.5% - 3.7% Consistent Interest Margins Cost of Fu
Slide 25: Products
Products Building a Comprehensive Portfolio of Products Customer-centric approach for creating products Leverage Cross-sell & Up-sell opportunities Comprehensive product suite Pipeline of products for continuous growth Retail Agriculture MSME Loans Liability Products ADC Channels Agri Schemes CA Cre
Slide 26: Digital and Technology
Digital and Technology Digital Touchpoints 3,467,607 748,383 5,340,180 Mobile App Installations Net Banking Users Debit Cards 87,695 1,626,836 1,504 QR related metrics E-Passbook Downloads ATM Networks 25
Slide 27: Digital and Technology
Digital and Technology Awards Business Model Innovation Digital Media Excellence Award Gold Winner award for enhancing Co-lending platform by Infosys Finacle for best use of digital content marketing hosted by Indiatelevison.com 26
Slide 28: Digital and Technology
Digital and Technology Moving towards a Digital-First Bank Creating a disruptive ”Bank within a Bank” Our Objectives Infrastructure to Meet Our Objectives First-in-class digital factory Increase in Customer Base Products and Business Solutioning have been integrated into the Technology and Digital H
Slide 29: Digital and Technology
Digital and Technology Scalable and Reliable Architecture Embedding data & analytics in business processes for data-driven decision making Foundation of Architecture Integration with the Business Impact on the Business First-in-class scalable central data Retail Loan Propensity repository on cloud w
Slide 30: Analytical Centre of Excellence - Business Adoption
Analytical Centre of Excellence - Business Adoption Propensity Engagement Distribution Business Potential Branch Channel Digital Channel Amount (INR Cr.) CASA* ~3,000 Non Managed Portfolio A/c’s Managed Portfolio A/c’s Campaigns Retail TD* ~1,500 Assets* ~12,000 (PL/HL/VL/GL/MSME) Top Identified Cam
Slide 31: Digital and Technology
Digital and Technology Best in class Analytics Factory: 360day PitStop Business Dashboards Driving Agility and Precision in Decisions Business Systems ensuring New Insights have Rails for Outcomes Customer Relationship Early Warning Signals Management (CRM) (EWS) CASA Balance Buildup Dashboard Branc
Slide 32: Our Strengths and Strategies
Our Strengths and Strategies Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 33: Strategic Roadmap
Strategic Roadmap Creating a Strengthening Financial A Performance-Driven C Position to Create Culture Long-Term Value Delivering Excellence in Digitalisation and Core Businesses with Partnership to Underlying Technology Rebuild Outward-Facing, Accelerate Book Growth Transformative steps Platform le
Slide 34: 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 ▪ Outbound Sales Culture Happy customers ▪ Startup-like Agility 100 Year Legacy 34.1% 46.4% ▪ Capitalise on community network ▪ MSME and Rur
Slide 35: Diversified Offerings with Established Brand Equity
Driving Excellence in Proven Core Competencies A. Diversified Offerings with Established Brand Equity Retail and Personal Banking Agriculture Banking MSME ▪ Housing ▪ Agriculture & allied activities ▪ Working capital finance for traders & ▪ Vehicle ▪ Farm development manufacturing industries ▪ Gold
Slide 36: Key Capabilities in Place to Leverage Government Business
Driving Excellence in Proven Core Competencies A. Key Capabilities in Place to Leverage Opportunities in the Government Business Focused to be one of the top govt. collection Banks Empaneled as 'Agency Bank’ for direct tax collection Integrated on National Jan Samarth portal State-level Treasury int
Slide 37: Strong Geographical Footprint
Driving Excellence in Proven Core Competencies A. Strong Geographical Footprint Steady Growth in Locations Served 7 4 2 9 21 1 10 12 2 927 1,504 1 Branches ATM and Recyclers 3 16 7 20 5 Presence Across All Tiers 9 57 Top 5 States Rural 27 Karnataka 589 23.3% Metro 27.7% Maharashtra 57 7 44 589 Total
Slide 38: Rebuild Outward-Facing, Business-Centric Teams
Creating a Performance Driven Culture B. Rebuild Outward-Facing, Business-Centric Teams Outbound sales team and “Feet on the Street” for growing Inducted 365 Sales Officers and 270 Feet on Ground for liabilities and expanding the home loan book covering key markets and target segments Better control
Slide 39: Foundation in place to Drive Next Leg of Digital Innovation
Digitalisation Propelling Robust Book Growth C. Foundation in place to Drive Next Leg of Digital Innovation ▪ Live with CRM: Integration of customer data and interactions across Marketing and Sales department State-of-the-art ‘Technology, Digital & ▪ Enhance customer engagement and improve Launched
Slide 40: Initiatives towards Digitisation
Digitalisation Propelling Robust Book Growth C. Initiatives towards Digitisation Planned future initiatives for 2025 Bank-wide Liability Platform for Seamless Pre-approved and Hyperlocal SEO and National Back Office Onboarding across Flow-Based Loans Martec Platform Transformation journeys Core Syst
Slide 41: 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