Karur Vysya Bank Ltd. · NSE:KARURVYSYA
Karur Vysya Bank — Q2 FY2019-20 Earnings Presentation
60 slides from Karur Vysya Bank's earnings presentation, Nov 1, 2019
Slide 1: Karur Vysya Bank filing letter to NSE
KVB) Karur Vysya Bank IRC: F48:138:1096:201901.11.2019 The Manager, National Stock Exchange of India Ltd., Exchange Plaza, 5th Floor, Plot No. C/l,'G'Block, Bandra - Kurla Complex, Bandra (East) Mumbai400 051 Dear Sir, Sub: Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regu
Slide 2: Investor Presentation: Business Performance
INVESTOR PRESENTATION 30.09.2019 Business Performance 31.12.2018 1
Slide 3: Disclaimer
DISCLAIMER This presentation has been prepared by Karur Vysya Bank Limited (“the Bank”) solely by the Bank for information purposes only. This presentation is not a complete description of the Bank and the information contained herein is only current as of its date and has not been verified by anyon
Slide 4: The Bank of choice - trusted by all
The Bank of choice - trusted by all Over Over Over 7 million 450000 700000 individuals businesses agri customers 3
Slide 5: KVB – a unique franchise!
KVB – a unique franchise! Bank of Choice, trusted by : Over 7 million individuals Over 450000 businesses Over 700000 customers involved in agriculture 1 6 1 Unmatched presence in India’s fast growing hinterland 6 12 1 Category No. of Branches 6 1 Metro 200 4 1 15 14 Urban 155 1 5 Semi Urban 29
Slide 6: Blending Tradition with Modernity
Blending Tradition with Modernity • Business model transformation progressing well • Digital platform stable and scaling as expected Number of retail application processed in H1-FY’20 is equal to 105% of FY’19 Small Business Loans (digital) new loans disbursed grew 85% in value over Q1-FY’20.
Slide 7: Our journey
KVB’s traditional business model Transformed business model Branch — the sole distribution platform Branch—one of the distribution platforms Operationally intensive — branch Responsible for liabilities (all types) and handling most operational tasks of retail/small commercial loans the bank D
Slide 8: KVB Distribution Evolution
KVB DISTRIBUTION EVOLUTION Pre - 2016 2016 - 2018 Now Branch Branch Acquire & Manages Liability Businesses, Retail & Small Commercial Business , i.e < 200lacs Branch All retail & SME customers Business Banking Unit Manages all Medium tier SME acquired & Managed by accounts Branches Corporate Busines
Slide 9: KVB NEO - a Bank within a Bank
KVB NEO - “a Bank within a Bank“ KVB Neo - Specialist entity to engage the market through alternate distribution mechanisms viz.: aggregation through third parties; outbound sales force; Fintech partnerships; co-origination etc. Staffed with industry specialists (business, product, risk, sal
Slide 10: Improving Portfolio Performance
Improving Portfolio Performance Ever 30+ % @ 6 & 12 Month On Book (MOB) Portfolio Retail 120 120 100 100 93 100 87 100 88 88 78 80 79 100 100 80 68 68 80 60 87 63 82 60 74 73 60 78 45 72 71 63 40 40 57 48 40 53 20 20 33 24 - - 6 MOB 12 MOB 6 MOB 12 MOB Commercial 120 • Month on Book – Performance of
Slide 11: ~90% of Loans approved digitally in FY20
~90% of Loans^ approved digitally in FY20 Retail Loans 100.0% 100.0% 16.0% 72.2% 22.1% 100.0% 77.9% 13.0% 84.0% 87.0% HL (Incl. Top-up) Mortgage Loan Vehicle Loan (4W) Personal Loan Vehicle Loan (2W) Education Loan Total Excludes Staff Loans and Jewel Loans Digital To be digitized
Slide 12: Operation Centralization
Operation Centralization Process Standardization Increased Operational Risk Consistency & Repeatability Management Operation Centralization • 170 tasks & 60 processes identified for centralization • Use of systems & automation tools to Enhanced enhance productivity Cost & Resource Control Management
Slide 13: Q2 Highlights
Q2 HIGHLIGHTS
Slide 14: Highlights
Highlights BUSINESS CRAR Total Business up by 5% CRAR at 15.99% & @ Rs. 1,11,601 crore Tier I at 14.25% PROFIT – Q2 CREDIT Operating Profit Rs. 431 crore Gross Advances grew Y-o-Y Net Profit Rs. 63 crore by Rs. 1,248 crore to Rs. 49,388 crore NIM – Q2 CASA 3.46% CASA share @ 30 % Total Deposits up b
Slide 15: Results Snapshot
(Rs. crore) Results Snapshot* Financial Indicators – 30.09.2019 Other Business Parameters YoY Growth Gross NPA 4,391 Parameter Amount % Net NPA 2,118 Total Gross NPA % 8.89 62,213 7 Deposits Net NPA % 4.50 Gross PCR % 49,388 3 61.82 Advances Total 1,11,601 5 Basel III Capital Business CRAR 15.99 Tie
Slide 16: Business Profile (Averages)
(Rs. crore) Business Profile (Averages) Y-o-Y Growth Particulars Sep 19 Sep 18 Amount % Avg. Deposits 60,952 57,134 3,818 7 Avg. Demand Deposit 5,833 5,480 353 6 % to Total 9 10 Avg. Savings Deposit 12,029 11,054 975 9 % to Total 20 19 Avg. Time Deposit 43,089 40,600 2,489 6 % to Total 71 71 CASA 17
Slide 17: Business Profile
(Rs. crore) Business Profile* Y-o-Y Particulars Sep 19 Sep 18 % Total Deposits 62,213 58,262 7 Demand 6,142 5,790 6 Savings 12,380 11,411 8 CASA 18,522 17,201 8 Term Deposits 43,691 41,061 6 CASA % 30 30 Gross Advances 49,388 48,141 3 Net Advances 47,102 46,480 1 Total Business 1,11,601 1,06,403 5 *
Slide 18: Balance Sheet
Balance Sheet (Rs. crore) Particulars Sep 19 Sep 18 Y-o-Y (%) Capital & Liabilities Capital 160 160 - Reserves and Surplus 6,341 6,181 3 Deposits 62,213 58,262 7 Borrowings 3,052 1,903 60 Other Liabilities and Provisions 1,648 1,433 15 Total 73,414 67,939 8 Assets Cash and Balances with RBI 3,487 3,
Slide 19: Capital Adequacy – Basel III
(Rs. crore) Capital Adequacy – Basel III Capital as at Nature Sep - 19 Mar-19 Mar-18 Mar-17 Mar-16 Tier I 6,223 6,245 6,145 4,790 4,064 Tier II 760 751 226 278 330 Total 6,983 6,996 6,371 5,068 4,394 14.43% 16.00% 15.99% 12.54% 13.92% 14.28% 14.25% 11.85% Entire Tier I comprises of CET1 capital, wel
Slide 20: Financial Performance
FINANCIAL PERFORMANCE
Slide 21: Profit and Loss A/c (Qtr.)
(Rs. crore) Profit and Loss A/c (Qtr.) Q2 Q2 YoY Q1 Particulars- FY 19-20 FY 18-19 (%) FY 19-20 Net Interest Income 596 579 3 584 Other Income 278 175 59 270 Total Income 874 754 16 854 Operating Expenses 443 393 13 409 Operating Profit 431 361 19 445 Provisions 365 213 71 330 Credit Related 347 191
Slide 22: Profit and Loss A/c (Half-year)
(Rs. crore) Profit and Loss A/c (Half-year) H1 H1 Particulars YoY (%) FY 19-20 FY 18-19 Net Interest Income 1,180 1,163 1 Other Income 548 430 27 Total Income 1,728 1,593 8 Operating Expenses 852 772 10 Operating Profit 876 821 7 Provisions 695 636 9 Credit Related 666 569 17 Others 29 67 - Profit B
Slide 23: Operating Profit (Qtr)
(Rs. crore) Operating Profit (Qtr) 510 27 57 67 91 398 407 382 378 340 240 -30 -21 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Core Operating Profit Investment Trading Profit 500 3.0 2.7 2.5 2.4 2.4 2.1 250 2.0 464 445 425 431 361 0 1.0 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Operating Profit Operating Profit M
Slide 24: Income v/s Expenses (Qtr)
(Rs. crore) Income v/s Expenses (Qtr) Net Interest Income Non Interest Income 300 650 618 273 270 278 579 581 584 596 260 325 150 175 0 0 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Total Operating Income Operating Expenses 900 700 891 854 874 841 754 450 350 218 215 230
Slide 25: Break Up of Other Income
(Rs. crore) Break Up of Other Income Quarter Half year ended Particulars YoY YoY Sep 19 Sep 18 Jun19 Sep 19 Sep 18 (%) (%) TOTAL NON-INT. INCOME 278 175 59 270 548 430 27 1) Fee Income 153 158 (3) 168 321 333 (4) 2) Investment trading profit 91 (21) - 67 158 (14) - 3) Forex Income 10 7 43 9 19 20 (5
Slide 26: Healthy Other Income Profile (Qtr)
(Rs. crore) Healthy Other Income Profile (Qtr) Growth in Other Income 300 40 32 32 • Non interest income accrues 31 31 through diverse sources - fee based, 23 e-transactions, third party products etc. 150 20 260 273 270 278 • 32% share in total operating income 175 Q2 (FY 2019-20) 0 0 Sep 18 Dec 18
Slide 27: Break Up of Operating Expenses
(Rs. crore) Break Up of Operating Expenses Quarter Half year ended Particulars YoY YoY Sep 19 Sep 18 Jun 19 Sep 19 Sep 18 (%) (%) Staff Expenses 213 172 24 204 417 351 19 Of above – Prov. for employee 48 22 - 39 87 51 - retirement benefits Other Operating Expenses 230 221 4 205 435 421 3 TOTAL OPG.
Slide 28: Key Ratios (Qtr)
Key Ratios (Qtr) NIM^ Cost to Income 3.88% 52.12% 50.67% 3.57% 3.60% 49.45% 3.49% 3.46% 47.88% 47.87% Sep 18 Dec 18 Mar 19 June 19 Sep 19 Sep 18 Dec 18 Mar 19 June 19 Sep 19 ROA ROE 0.49% 5.28% 0.35% 0.40% 4.49% 0.34% 3.74% 3.87% 0.12% 1.33% Sep 18 Dec 18 Mar 19 June 19 Sep 19 Sep 18 Dec 18 Mar 19 J
Slide 29: Key Ratios (Qtr.)
Key Ratios (Qtr.) Particulars Q2 FY 19-20 Q2 FY 18-19 Cost of Deposits 5.86 5.85 Yield on Advances 9.85 9.79 Cost of Funds 5.95 5.87 Yield on Funds 8.59 8.66 NIM 3.46 3.57 Spread 2.64 2.79 Cost to Income Ratio 50.67 52.12 Business/Emp. (Rs. Crore) 13.88 13.70 Profit/Emp. (Rs. Lakh) 3.15 4.31 3.94% 4
Slide 30: Key Ratios (Half year)
Key Ratios (Half year) Particulars H1 FY 19-20 H1 FY 18-19 Cost of Deposits 5.84 5.82 Yield on Advances 9.73 9.82 Cost of Funds 5.90 5.83 Yield on Funds 8.59 8.67 NIM 3.47 3.61 Spread 2.69 2.84 Cost to Income Ratio 49.28 48.47 Business/Emp. (Rs. Crore) 13.88 13.70 Profit/Emp. (Rs. Lakh) 3.39 3.34 4.
Slide 31: Other Financial Ratios
Other Financial Ratios Quarter Half year ended Particulars Sep 19 Sep 18 Sep 19 Sep 18 Cost to Income (%) 50.67 52.12 49.28 48.47 Operating Profit/ Total Income (%) 23.75 22.14 24.49 24.66 Net Profit/ Total Income (%) 3.49 5.13 3.80 3.89 Other Operating Expenses / Total Income (%) 12.66 13.52 12.15
Slide 32: Portfolio Performance
PORTFOLIO PERFORMANCE
Slide 33: Advances Portfolio
(Rs. crore) Advances Portfolio Y-o-Y Particulars Sep 19 Sep 18 Growth % Gross Advances 49,388 48,140 3 Commercial 16,118 16,551 (3) Corporate 13,278 14,430 (8) Retail (Personal Banking)* 11,763 8,855 33 Agriculture 8,229 8,304 (1) Jewel Loans 8,117 7,651 6 (incl. in above) *Includes IBPC of Rs.1,325
Slide 34: Advances (Segment by value)
(Rs. crore) Advances (Segment by value) 17056 16551 16095 16118 14397 14430 14169 13278 11763 11278 8855 7620 8304 8113 8229 7861 Mar 18 Sep 18 Mar 19 Sep 19 ABG CBG CIG PBG Segments ABG – Agri CBG – Commercial (<= Rs. 25 crore) CIG – Corporate (> Rs. 25 crore) PBG – Personal 33
Slide 35: Advances – Segment Share
Advances – Segment Share Sep 19 17% 33% 27% 24% Mar 19 16% 34% 28% 22% Sep 18 17% 34% 31% 18% Mar 18 17% 35% 31% 17% ABG CBG CIG PBG Segments ABG – Agri CBG – Commercial (<= Rs. 25 crore) CIG – Corporate (> Rs. 25 crore) PBG – Personal 34
Slide 36: Retail & Commercial Loans Portfolio components
Retail & Commercial Loans Portfolio components Retail Portfolio Composition CBG portfolio by size 5% 11% 28% 35% 84% 2% 4% 6% 9% 15% < 50 Mn >= 50 Mn < 100 Mn >= 100 Mn Housing Mortgage (LAP) Vehicle Jewel Loans Personal Loans Education Loans Others • Average ticket size - Rs. 4 Mn • 84% of commerci
Slide 37: Robust Growth in Retail Segment
(Rs. crore) Robust Growth in Retail Segment 678 Sep-19 1,040 1,804 4,164 625 FY 19 1,044 1,712 3,619 578 FY 18 1,017 1,393 2,795 596 FY 17 921 965 2,330 703 FY 16 831 787 2,094 Jewel Loans Vehicle Mortgage (LAP) Housing 36
Slide 38: Retail Portfolio
(Rs. crore) Retail Portfolio Advances outstanding as at Segment Sep -19 Mar-19 Mar-18 Mar-17 Mar-16 Housing 4,164 3,619 2,795 2,330 2,094 Mortgage (LAP) 1,804 1,712 1,393 965 787 Vehicle 1,040 1,044 1,017 921 831 Jewel Loans 678 625 578 596 703 Personal Loans 502 424 296 316 354 Education Loans 225
Slide 39: Corporate Book
(Rs. crore) Corporate Book * Corporate advances > 1 Bn amount to less than 7.5% of total advances 5000 12.0 10.4 9.9 9.7 4000 4996 9.0 4653 8.1 8.0 4547 7.4 7.4 4055 3854 3624 3672 3000 6.0 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 > 100 crore % of Advances 27% 15% 31% 26% • Average ticket si
Slide 40: Advances – Composition
Advances – Composition Well spread sub-sectorial exposures & diversified industrial exposures Rs.494 Bn Breakup of Industrial exposure (Rs.120 Bn) OTHER EXPOSURES NBFC 4% 14% MANUFACTU INFRASTRUCTUR RING SECTOR BILLS 2% E 3% 25% Agri 3% OTHERS 6% POWER 1% CRE 6% JEWEL LOAN 16% TRADING 15% PERSONAL G
Slide 41: Advances – Composition
Advances – Composition Short term credit (Working Capital) forms major part of credit portfolio 79% 79% 80% 75% 76% 21% 21% 20% 25% 24% FY 16 FY 17 FY 18 FY 19 Sep 19 Working Capital Loans Term Loans Low concentration: Top 20 borrowers (% of overall loans) 10% 10% 8% 7% 7% FY 16 FY 17 FY 18 FY 19 Se
Slide 42: Security Coverage
(Rs. crore) Security Coverage Nature of security 30.09.19 Exposure backed by - Letter of Credit 284 Liquid Assets ^ 9,155 Vehicles 2,740 Commodities 431 Total (1) 12,610 Exposure secured by Immovable Property (% Coverage) > 100% 23,008 90% to <100% 7,353 75% to <90% 1,676 50% to <75% 3,689 <50% 3,35
Slide 43: Advances – Composition
(Rs. crore) Advances – Composition Growth Particulars Amount % to Total Advance Over Sep 18 Sep 19 Sep 18 June 19 Sep 19 Sep 18 Amt % Manufacturing 12,006 13,257 12,412 24 28 (1,251) (9) Trading 7,052 8,079 7,560 14 17 (1027) (13) Jewel loan 8,130 7,651 7,890 16 16 479 6 Personal loans @ 7,918 6,466
Slide 44: Manufacturing Sector - Industry Wise
(Rs. crore) Manufacturing Sector - Industry Wise Amount % to Total Advance Y-o-Y Growth Industry Sep 19 Sep 18 Sep 19 Sep 18 Amount % Textile 3,786 3,827 7.7 7.9 (41) (1) Infrastructure 2,024 2,604 4.1 5.4 (580) (22) Basic Metal & Metal Products 791 1,129 1.6 2.3 (338) (30) Food Processing 331 885 0
Slide 45: Infrastructure Advances
(Rs. crore) Infrastructure Advances Amount O/s % to Total Advance Y-o-Y Growth Infrastructure Sep 19 Sep 18 Sep 19 Sep 18 Amt % Power 607 653 1.2 1.3 (46) (1) Road 481 419 1.0 0.9 62 13 Infra Others 935 1,532 1.9 3.2 (597) (64) TOTAL 2,024 2,604 4.1 5.4 (580) (22) Power Sector Exposure Ownership Sep
Slide 46: Sector-wise Restructured Advances
(Rs. crore) Sector-wise Restructured Advances Amount % to Total Restructured Advances Sep -19 S. N. SECTOR Sep 19 Sep 18 19.49 1 Textile 32.04 - 35.23 2.07 2 Food & Food Processing 20.67 - 4.84 3 Wood & Wood Products 19.96 - 0.65 12.57 4 Transport sector 8.52 - 2.09 1.32 12.14 5.18 4.40 5 Rubber & R
Slide 47: Stressed Book Analysis
Stressed Book Analysis (Rs. crore) Movement of Restructured Advances Apr-19 to Sep - Apr 18 to Sep- 3000 2816 2819 5.00 19 18 2728 2673 Particulars 2495 324 361 A/c’s Amt. A/c’s Amt. 372 446 A. Position at the beginning of 397 4.06 34 72.09 22 262.43 3.95 3.89 the period 3.67 3.72 2000 B. Addition d
Slide 48: Portfolio performance
Portfolio performance Portfolio performance Balance in INR, Base Mar. 31, 2017 = 100 SMA-1 SMA-2 SMA 30+ 200 184 180 161 168 160 140 117 120 107 110 106 120 100 98 100 94 88 80 75 63 76 59 63 100 60 84 81 82 82 45 40 60 65 44 46 45 20 51 43 40 37 0 Portfolio performance 31.03.17 30.06.17 30.09.17 31
Slide 49: Provision Coverage Ratio
Provision Coverage Ratio 61.82 58.50 59.05 56.50 56.50 56.09 56.86 54.09 54.07 50.62 47.02 44.07 42.89 41.72 39.55 36.17 34.89 32.40 Sep 17 Dec 17 Mar 18 June 18 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Provision Coverage Ratio % NPA Provision on Gross NPA % 48
Slide 50: NPAs & Provisions
(Rs. crore) NPAs & Provisions 4450 4511 4391 4056 3707 8.79 9.17 8.89 2322 8.49 2420 2118 2052 2296 2121 7.70 1692 1961 1590 2223 4.99 4.98 4.94 4.41 4.50 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Sep 18 Dec 18 Mar 19 June 19 Sep 19 Gross NPA Net NPA NPA Provision Net NPA% Gross NPA% Upgradation / Accreti
Slide 51: Movement of NPA
(Rs. crore) Movement of NPA Particulars Apr 19 – Sep 19 Apr 18 - Sep 18 Gross NPAs Opening Balance 4,450 3,016 Additions during the period 891 975 Reductions during the period 949 284 Closing Balance 4,391 3,707 Net NPAs Opening Balance 2,420 1,863 Additions during the period 126 312 Reductions/writ
Slide 52: Other Parameters
OTHER PARAIVIETERS
Slide 53: Business Growth
(Rs. thousand crore) Business Growth 120 103 111 111 120 95 89 6 6 6 80 60 62 80 5 57 50 54 4 11 12 12 10 40 40 8 41 46 51 49 39 0 0 FY 16 FY 17 FY 18 FY 19 Sep 19 FY 16 FY 17 FY 18 FY 19 Sep 19 Savings Demand Advances Deposit Business Loans and Advances 20 35% 29% 30% 30% 28% 80% 71% 50 30% 66% 66%
Slide 54: Retail Liability Franchise : Granular & Sticky
Retail Liability Franchise : Granular & Sticky 7% 9% Term deposits are < Rs.15 Lakhs primarily retail deposits Rs.15 Lakhs-Rs.1 Cr 21% 93% of term deposits Rs.1 Cr-Rs.5 Cr > Rs.5 Cr are < Rs.5 Cr 63% Low concentration of Deposits Low dependence on wholesale deposits 20% 10% 9% 7% 6% 70% 6% 6% FY
Slide 55: Investment Portfolio
Investment Portfolio Investments (Rs. crore) Portfolio wise Investment 18670 15780 15137 1.32% 34.73% 63.95% Sep 18 Mar-19 Sep 19 HTM AFS HFT Duration Investment Portfolio AFS* HFT HTM* 0.72% 20.75% 1.19 0.20 3.63 Yield on Investment 78.53% 6.91% 7.04% 6.85% SLR Debentures/CD/MF/CP Shares Debentures
Slide 56: Provisions and Contingencies
(Rs. crore) Provisions and Contingencies Quarter Half year ended Provision for Sep 19 Sep 18 Sep 19 Sep 18 NPA 335 207 653 610 Standard Assets 11 (16) 9 (10) Restructured Advances 2 - 5 (9) SDR, S4A, 5/25 etc. - - - (10) NCLT (specific a/c’s) - - - (12) Others (incl. NPI) 4 11 17 50 Investment Depre
Slide 57: Leveraging Technology - Delivery Channels
Leveraging Technology - Delivery Channels Market share in RTGS transactions POS Terminals POS TERMINALS 22068 22873 21959 21493 1.14% 1.16% 1.07% 1.04% 0.99% 10157 Mar-16 Mar-17 Mar-18 `Mar- 19 Sep-19 Mar-16 Mar-17 Mar-18 `Mar- 19 Sep-19 Share of RTGS transactions (by volume) Exponential growth in M
Slide 58: Human Resources
Human Resources Young workforce….. … well qualified … … lower attrition … Others 10% 35 34 3.9% PG 33 33 33 Graduat 54% e 2.7% 2.7% 36% 2.2% 1.6% FY16 FY 17 FY 18 FY 19 Sep-19 FY16 FY 17 FY 18 FY 19 Sep-19 … leading to improved productivity 142 143 14.42 134 134 130 13.88 8.2 12.85 12.92 7.9 12.4 4.
Slide 59: A Decade of Progress
(Rs. crore) A Decade of Progress Year 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Paid up Capital 54 94 107 107 107 122 122 122 145 160 Reserves 1,566 2,020 2,601 2,978 3,219 4,124 4,451 4,723 6,066 6,205 Owned funds 1,620 2,114 2,708 3,085 3,326 4,246 4,573 4,845
Slide 60: Thank You
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