Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — Q2 FY24 Earnings Presentation
37 slides from Karnataka Bank's earnings presentation, Nov 2, 2023
Slide 1: Exchange intimation letter on Q2FY24 investor 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 02.11.2023 HO: SEC:230:2
Slide 2: Investor Presentation Q2 FY24
INVESTOR PRESENTATION Q2 FY24 Banking with Legacy, Embracing the Celebrating 100 years of trust Future
Slide 3: Table of Contents
01 Independent Board and Experienced Management Team 02 Progress during the Quarter 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 ▪ Centralise op
Slide 7: Progress during the Quarter
Progress during the Quarter Q2FY24 Banking with Legacy, Embracing the Celebrating 100 years of trust Future
Slide 8: Key Milestones: Capital for Growth
Key Milestones Capital for Growth Tranche 1 – INR 800 Cr. ▪ Allotment completed post receipt of shareholder approval ▪ Backed by marquee institutional investors 1500 Cr. Tier-1 Capital Approved by the Board Tranche 2 – INR 700 Cr. ▪ Raising of INR 700 Cr. funds by issue of equity shares by way of QI
Slide 9: Key Milestones: Digital and data-driven client acquisition
Key Milestones Digital and data-driven client acquisition CRM Outbound Launched Leveraging Website KBL Mobile Sales Team CRM Customer360 Development Plus ▪ Inducted ~250 Sales ▪ Integration of customer ▪ Comprehensive ▪ Target to go live in ▪ Enhanced customer Officers and ~400 Feet data and interac
Slide 10: Key Milestones: New Products Launched During the Quarter
Key Milestones New Products Launched During the Quarter Corporate Salary Account KBL-Swarna Bandhu Collection of GST Schemes ▪ Bundled salary proposition, including ▪ Partnered with SahiBandhu, a gold loan zero balance account with concessions ▪ Live with GST service and collection aggregator for lo
Slide 11: Key Milestones: Awards & Recognitions in Q2
Key Milestones Awards & Recognitions in Q2 Infosys Finacle Business Icon Award 2023 ET Iconic Brands of (Innovation awards 2023) (Finance and Banking Sector) India 2023 Received by Shri Vinay Kulkarni, Dy. GM & CTrO, & Received by Shri Nagaraja Upadhyaya, DGM, RO Received by Shri. Raghavendra, DGM,
Slide 12: Strategic Roadmap
Strategic Roadmap “Start up @ 100” Banking with Legacy, Embracing the Celebrating 100 years of trust Future
Slide 13: 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 14: 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 36.6%2 46.2% ▪ Capitalise on c
Slide 15: Continued Transition Towards Retail
Driving Excellence in Proven Core Competencies A. Continued Transition Towards Retail Strategy Progress 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 Busi
Slide 16: 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 17: Strengthen Financial Position: Government Business
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 18: 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 19: 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 Hub’ at Bengaluru transformation initiatives advised by ▪ 40,000 sq. ft. super built-up area Boston Consulting Group ▪ 37
Slide 20: 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 21: Digital First 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 Exploring partnerships with Tie-up with reputed NBFC and HDFC Life, Bajaj Life, Bharti new age technology se
Slide 22: Our Strengths
Karnataka Bank Our Strengths Banking with Legacy, Embracing the Celebrating 100 years of trust Future
Slide 23: Key Strengths
Key Strengths Key Highlights Strong governance 99 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 es
Slide 24: Longstanding Legacy Delivering Consistent Growth
Longstanding Legacy Delivering Consistent Growth Key Highlights over 5 Years Mar’18 Mar’23 Mar’18 Mar’23 INR INR 3.1% 3.7% 70,374 Cr 99,058 Cr Total Assets NIM % INR INR 47.6% 47.1% 62,871 Cr 87,368 Cr Total Deposits Cost to Income % 4.9%/ 3.7%/ 27.9% 33.0% 3.0% 1.7% CASA Ratio GNPA/NNPA 6.1% 4.7% 6
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 1,480 877 901 903 7 4 2 8 21 1 9 10 2 1 Mar-22 Mar-23 Sep-23 Branches ATM & Recyclers 3 16 7 20 5 8 Presence Across All Tiers 53 26 Rural Metro Top 5 States 22.9% 27.9% 7 43 Karnataka 577 577 Maharas
Slide 27: Financial Highlights
Karnataka Bank Financial Highlights Banking with Legacy, Embracing the Celebrating 100 years of trust Future
Slide 28: Karnataka Bank at a Glance (Half Yearly Results)
Financial Highlights Karnataka Bank at a Glance (Half Yearly Results) Particulars H1FY24 H1FY23 Growth Y-o-Y Total Assets 1,05,856 97,077 9.0% Gross Advances/(% Retail) 66,936/(48.9%) 60,991/(49.6%) 9.7% Deposits 89,532 81,634 9.7% Retail Deposits 60,962 54,343 12.2% CASA Ratio 31.91% 32.82% (91 bps
Slide 29: Karnataka Bank at a Glance (Quarterly Results)
Financial Highlights Karnataka Bank at a Glance (Quarterly Results) Particulars Q2FY24 Q1FY24 Growth Q-o-Q Q2FY23 Growth Y-o-Y Total Assets 1,05,856 99,120 6.8% 97,077 9.0% Gross Advances/(% Retail) 66,936/(48.9%) 63,012/(48.1%) 6.2% 60,991/(49.6%) 9.7% Deposits 89,532 86,960 3.0% 81,634 9.7% Retail
Slide 30: Liability Profile
Liability Profile Deposit Profile (in INR Cr) Retail Term Deposit Breakup (Sep-23) 87,368 89,532 Above 5 cr 81,634 2 cr to 5 cr 75,655 80,387 4.4% 71,785 4.0% 68,452 62,871 67% 68% 69% 67% 67% 70% 71% 67% 28% 28% 29% 32% 33% 33% 33% 32% 5% 2% FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 Below 2 cr 91
Slide 31: Advances
Advances Net Advances Profile (in INR Cr) 56,783 65,422 56,964 59,952 59,872 54,828 51,516 20.4% 24.8% 47,252 20.2% 21.1% 30.3% 25.8% 13.2% 27.3% 31.7% 29.5% 26.3% 33.8% 29.3% 28.7% 26.9% 27.6% 53.0% 57.8% 50.3% 49.6% 48.9% 45.1% 42.9% 45.5% FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 Retail Mid cor
Slide 32: Asset Quality
Asset Quality GNPA & NNPA Provision Coverage (PCR) % 4.9% 4.8% 4.9% 4.4% 3.9% 3.7% 80.9% 83.2% 3.4% 3.5% 80.0% 73.5% 70.0% 3.0% 3.0% 3.1% 3.2% 64.7% 2.4% 58.5% 1.7% 1.7% 54.6% 1.4% FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 Gross NPA % Net NPA % GNPA Brea
Slide 33: Asset Quality: Restructured Portfolio
Asset Quality Restructured Portfolio Standard Restructured Portfolio – Movement Standard Restructured Portfolio – Break-up Particulars (INR cr) Q2 FY24 Personal Loans 3.1% Opening balance 2,534 Others Agriculture 0.5% 3.1% CRE 4.0% Fresh restructuring during the period - MSME Increase in balance in
Slide 34: Profitability
Profitability Operating Revenue (INR Cr.) Other Income 1 (INR Cr.) 4,178 3,678 1,155 3,292 3,445 1,003 2,812 2,907 861 870 818 2,211 729 1,883 541 531 FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 Operating Profit (INR Cr.) PAT (INR Cr.) 52% 71% 82% 92% 66%
Slide 35: Profitability
Profitability Net Interest Margin Cost to Income ratio 3.7% 3.6% 3.6% 52.6% 3.2% 3.2% 50.1% 49.7% 2.9% 2.9% 2.8% 47.6% 47.4% 49.2% 47.1% 45.7% FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 Return on Equity Return on Assets 16.5% 1.4% 15.4% 1.2% 14.4% 8.5% 1.
Slide 36: Key Ratios
Key Ratios CRAR RWA/Total Assets 17.4% 15.7% 16.2% 14.9% 15.3% 13.2% 63.9% 60.6% 63.3% 12.0% 12.7% 58.1% 56.6% 55.1% 54.7% 53.9% FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 FY18 FY19 FY20 FY21 FY22 FY23 H1FY23 H1FY24 LCR Credit Cost % 2.3% 2.4% 308.4% 311.6% 301.1% 314.3% 268.6% 246.6% 215.5% 1.5% 1
Slide 37: 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