Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — Investor Presentation (February 2024)
31 slides from Karnataka Bank's investor presentation, Feb 19, 2024
Slide 1: Karnataka Bank Ltd. - Regulation 30 Corporate Presentation Letter
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 19.02.2024 HO:SEC: 342:2
Slide 2: Corporate Presentation February 2024
Corporate Presentation February 2024 Banking with Legacy, Celebrating 100 years of trust Embracing the Future PRIVATE & CONFIDENTIAL. NOT FOR CIRCULATION
Slide 3: Table of Contents
Table of Contents SECTION 1 SECTION 3 Executive Summary Financial Highlights 01 02 03 04 SECTION 2 SECTION 4 Key Investment Highlights Appendix
Slide 4: Table of Contents
Table of Contents SECTION 1 SECTION 3 Executive Summary Financial Highlights 01 02 03 04 SECTION 2 SECTION 4 Key Investment Highlights Appendix
Slide 5: Focusing on core competencies
Focusing on core competencies Emphasis on our strength areas Our Legacy Building on Our Legacy Tradition with innovation 1924 12.92 Mn ▪ ▪ Outbound sales culture Year of incorporation Customers ▪ Startup-like agility 100 Year Legacy 35.4%1 46.3% ▪ Capitalised on community network Share of MSME & Bra
Slide 6: On a transformational journey since 2000 with momentum 2020 onwards
On a transformational journey since 2000 with momentum 2020 onwards PHASE I PHASE II PHASE III GROWTH: FY00-17 TRANSFORMATION: FY17-20 ACCELERATING TRANSFORMATION: 2020 onwards ▪ Adoption of CBS: Edgeverve ▪ Transformation Project partnering with Boston ▪ Focus on next leg of digital transformation
Slide 7: Karnataka Bank at a glance
Karnataka Bank at a glance Strong financial performance All figures in INR Mn 697,410 921,954 31.5%/ 91% 10,99,900 Scale Gross Advances1 Total Deposits Total Assets CASA %/ Retail term +9.5% YoY +9.0% YoY Deposits < INR 20 Mn +10.5% YoY 10,320 3.6% 15.2% 1.3% Profitability PAT Net Interest Margin RO
Slide 8: Strategic Foundations
Strategic Foundations 1 2 3 4 5 New-age private Create a sales centric Enhancing the product Moving towards analytics led Enhancing Performance sector bank driven by organization offerings Digital-First Bank partnerships • Launch of corporate • New Management with • Frontline employees to • Co-Lendi
Slide 9: Table of Contents
Table of Contents SECTION 1 SECTION 3 Executive Summary Financial Highlights 01 02 03 04 SECTION 2 SECTION 4 Key Investment Highlights Appendix
Slide 10: Key investment highlights
Key investment highlights 1. Added management depth since 2023 and is guided by an independent board 2. ‘Bharat ka Karnataka Bank’ growing through a multi-channel approach 3. Granular deposit franchise with 90.4% term deposits <INR 20 Mn 4. Double digit growth in advances, diversified across sectors
Slide 11: Added management depth since 2023…
Added management depth since 2023… Joined since February 2023 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 Team, Head, RBL; Co-Foun
Slide 12: …and is guided by an independent board
…and is guided by an independent board No shareholder holding >5% share capital in the Bank P Pradeep Kumar Justice A V Chandrashekar Jeevandas Narayan Part Time Chairman, Independent Independent Director Independent Director Director Srikrishnan H. Uma Shankar Kalmanje Gururaj Acharya MD & CEO Inde
Slide 13: 'Bharat ka Karnataka Bank'…
‘Bharat ka Karnataka Bank’… 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 Opened a branch Branches ATM & Recyclers in Ayodhya in 3 16 7 20 January 2024 5 8 Presence Across All Tiers 53 Top 5 States Rural Metro 26 Karnataka
Slide 14: …growing through a multi-channel approach
…growing through a multi-channel approach Outbound Sales Team and “frontline employees” for Inducted 222 sales officers1 and 353 feet on ground1 for growing liabilities and expanding home loan book covering key markets and target segments 14 Regional Offices resourced and empowered to handle Better
Slide 15: Granular deposit franchise with 90.4% term deposits <INR 20 Mn
Granular deposit franchise with 90.4% term deposits <INR 20 Mn Overall deposit has grown at a CAGR of 7.5% from FY21 to 9MFY24 Granular Term Deposits with 90.4% < INR 20 Mn Deposit Profile (in INR Mn) Retail Term Deposit Breakup (Dec-23) Share of top 20 Above INR 50 mn depositors: 3.01% 5.5% INR 20
Slide 16: Double digit growth in advances, diversified across sectors
Double digit growth in advances, diversified across sectors with ability to reprice and excess liquidity Gross Advances grew at 10.7% CAGR from FY21 to 9MFY24 Well diversified with MSME & Agri contributing 35.3% of total mix Gross Advances Profile (in INR Mn) Sectoral Loan Exposure (Dec-23) MSME NBF
Slide 17: Establishing a robust data analytics shop…
Establishing a robust data analytics shop… 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 and
Slide 18: …to enable cross-selling and maintaining healthy asset quality (1/2)
…to enable cross-selling and maintaining healthy asset quality (1/2) 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 Op
Slide 19: …to enable cross-selling and maintaining healthy asset quality (2/2)
…to enable cross-selling and maintaining healthy asset quality (2/2) GNPA at 3.6% (10 bps down from Mar-23) PCR has grown by 10.8 percentage points from FY21 to 9MFY24 GNPA & NNPA Provision Coverage (Incl. & excl. TWO1) 4.9% 80.9% 80.2% 80.8% 70.0% 73.5% 3.9% 3.7% 3.6% 3.3% 55.5% 58.2% 50.1% 38.8% 3
Slide 20: Digital strategies propelling book growth…
Digital strategies propelling book growth… Foundation in place to Drive Next Leg of Digital Innovation ▪ Live with CRM: Integration of customer data and interactions across Marketing and Sales department ▪ Enhanced customer engagement and improved business efficiency ‘Technology, Digital & Product H
Slide 21: …through co-lending with NBFCs, fintech partnerships and insurance tie-ups
…through co-lending with NBFCs, fintech partnerships and insurance tie-ups Digital first, private sector bank driven by fintech partnerships Co-lending Tie-ups Priority sector lending Insurance Crossed INR 1,000 Mn of Co-lending Co-lending tech Co-Origination Platform Disbursal KBL-Swarna DigiVriddh
Slide 22: Track record of delivering consistent financial performance
Track record of delivering consistent financial performance Highest in last 3 years Key Levers for ROA Expansion Returns on Avg. Total Assets (%) 1.3% A. Growth in advances through Retail, Agri, and MSME 1.2% 1.1% B. Increase cross-selling through analytics 0.6% 0.6% C. Optimize funding costs D. Cos
Slide 23: Table of Contents
Table of Contents SECTION 1 SECTION 3 Executive Summary Financial Highlights 01 02 03 04 SECTION 2 SECTION 4 Key Investment Highlights Appendix
Slide 24: Financial Highlights (1/2)
Financial Highlights (1/2) Operating Revenue (INR Mn.) Other Income (INR Mn.) Operating Revenue = Net Interest Income + Other Income 41,777 14,042 35,874 34,449 3,259 9,926 33,642 9,539 29,224 2,990 8,995 5,973 5,509 3,218 1,926 2,834 1,939 921 2,457 1,782 1,830 1,716 4,161 5,615 4,157 4,318 3,559 (
Slide 25: Financial Highlights (2/2)
Financial Highlights (2/2) Net Interest Margin Cost to Income Ratio 3.7% 3.6% 3.6% 52.6% 50.6% 3.2% 2.9% 46.8% 47.1% 47.9% FY21 FY22 FY23 9MFY23 9MFY24 FY21 FY22 FY23 9MFY23 9MFY24 Return on Equity Return on Assets 1.3% 1.2% 1.1% 15.4% 14.7% 15.1% 7.7% 7.4% 0.6% 0.6% FY21 FY22 FY23 9MFY23 9MFY24 FY2
Slide 26: Table of Contents
Table of Contents SECTION 1 SECTION 3 Executive Summary Financial Highlights 01 02 03 04 SECTION 2 SECTION 4 Key Investment Highlights Appendix
Slide 27: Income statement
Income statement All figures in INR Mn Particulars FY21 FY22 FY23 9MFY23 9MFY24 Interest Income 62,324 62,217 72,202 52,509 60,979 Interest Expense 40,492 37,306 40,351 29,259 36,332 Net Interest Income 21,832 24,910 31,851 23,250 24,647 Other Income 14,042 9,539 9,926 5,973 8,995 Net Total Income 3
Slide 28: Balance sheet
Balance sheet All figures in INR Mn Particulars FY21 FY22 FY23 Capital + Reserves1 66,424 70,947 82,134 Deposits 7,56,549 8,03,868 8,73,680 Borrowings 17,649 23,138 15,627 Other Liabilities & Provisions 15,533 17,886 19,142 Total Liabilities 8,56,154 9,15,840 9,90,583 Cash and Balance with RBI 48,66
Slide 29: Du-Pont Analysis (% of Avg. Total Assets)
Du-Pont Analysis (% of Avg. Total Assets) Particulars FY21 FY22 FY23 9MFY231 9MFY241 Interest Income 7.4% 7.0% 7.6% 7.3% 7.7% Interest Expense 4.8% 4.2% 4.2% 4.1% 4.6% Net Interest Income 2.6% 2.8% 3.3% 3.2% 3.1% Other Income 1.7% 1.1% 1.0% 0.8% 1.1% Net Total Income 4.2% 3.9% 4.4% 4.1% 4.3% Operati
Slide 30: Indian Banks: Record credit growth driven by under-penetration & improving asset quality
Indian Banks: Record credit growth driven by under-penetration & improving asset quality Bank credit growth at multi-year high… …yet it remains underpenetrated Indian Bank Credit Outstanding – Scheduled Commercial Banks (INR trillion) Domestic credit to Private Sector (% of GDP) – CY2021 YoY Growth
Slide 31: Disclaimer
Disclaimer This investor presentation has been prepared for general information purposes in respect of Karnataka Bank Limited (“Bank”) together with its subsidiary, as applicable (together, with the Bank, the “Group”) only, without regard to any specific objectives, suitability, financial situations
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