Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — FY2021 Earnings Presentation
58 slides from Karnataka Bank's earnings presentation, May 27, 2021
Slide 1: Karnataka Bank filing cover letter to exchanges
X8 Karnataka Bank Ltd. Your FamHy Bank, Across India Regd. & Head office Phone : 0824-2228222 Fax: 0824-2225588 P. B. No.599, Mahaveera Circle E-Mail : investor.grievance@ktkbank.com Kankanady Website : www.karnatakabank.com Manaaluru - 575 002 CIN : L85110KA1924PLC001128 SECRETARIAL DEPARTMENT May
Slide 2: Analysis of Financial Results March 2021
Analysis of Financial Results March 2021
Slide 3: Table of contents
Table of contents 1 Company Overview 2 Financial Performance 3 Business Strategy 2
Slide 4: Highlights – Q4 FY21
Highlights – Q4 FY21 3 Months 12 Months KPAs Q4 FY 21 * Q4 FY 20 Q3 FY 21 * FY 21 * FY 20 (` crs) Turnover 1,27,349 1,28,749 1,27,014 1,27,349 1,28,749 Asset size 85,581 83,313 84,050 85,581 83,313 Operating profit 383.69 391.54 437.96 1,999.03 1,656.77 Net profit 31.36 27.31 135.37 482.46 431.78 Re
Slide 5: Company Overview
Company Overview 01 97 years of banking history with Pan-India presence. 02 Strong & Robust technology and digital platforms. 03 Satisfactory productivity & capital adequacy ratios. Experienced management team & Professional Board with 04 highest Standards of Corporate Governance. 05 Diversified cre
Slide 6: History
History Initiated Bank’s transformation journey KBL-VIKAAS Digital journey for retail products Bonus issue in the ratio of 1:10 2017-21 Successful migration to Fin10 Customer base crossed the milestone of 1 crore. Business turnover crossed the historic milestone of ` 1,00,000 crore. Fo
Slide 7: Evolution
Evolution • Business Turnover of ` 1,27,349 crore as on 31.03.2021. ` 1,27,349 Cr business • 2,337 service outlets with 858 branches, turnover 1 Extension Counter, 1,001 ATMs and 477 recyclers in 554 centres across India as on 2,337 31.03.2021. And, all 36 e-Lobbies & 426 Outlets all mini e-Lobbies
Slide 8: Pan-India footprint
Pan-India footprint Area wise distribution of Branches Metro Urban Semi Urban Rural 21 7 2 4 8 23% 1 28% 9 10 1 2 3 16 7 20 5 23% 8 51 26% 25 17 25 7 41 538 1 Branches ATMs Recyclers 50 21 1210 1400 1026 1001 1200 836 848 858 1000 Has the strongest presence in South India 800 with 676 branches 454 4
Slide 9: Robust technology and digital platforms
Robust technology and digital platforms Strong technology platform Digital sanction of Home The existing “ISO 27001:2013” certificate encompassing loans, Personal loans, Car the Information Security Management System (ISMS) at loans, 2-wheeler loans & the Bank’s Data Centre, Near line Site [NLS] and
Slide 10: KBL-DCoE: Accelerating Digital Transformation Catalyst
KBL- DCoE DCoE : Accelerating Digital Transformation Catalyst C: Cost Optimization A: Adoption R : Risk Profile E : Experience 9
Slide 11: Effective Risk management systems
Effective Risk management systems 1 Periodical monitoring & reviewing of risk profile of the Bank. Internal Credit Rating of all the borrowers: Credit exposure above INR 25 lakh are rated borrower-wise and 2 credit facilities below INR 25 lakh & all schematic advances including agri-credit proposals
Slide 12: Financial Performance
Financial Performance 11 11
Slide 13: Financial strength of the Bank
Financial strength of the Bank Networth (` crs) 5,785 5,970 6,642 6000 5000 4000 5,659 6,331 5,503 3000 2000 1000 283 311 311 0 Mar '19 Mar '20 Mar '21 Capital Reserves 12
Slide 14: Income & Profit - Annual
Income & Profit - Annual Net Income (` crs) Operating and Net Profit (` crs) 4000 3,678 3500 3,292 1,999 2,907 2000 1,657 3000 1,495 1,262 1800 1,450 2500 1,002 1600 2000 1400 1500 1200 1000 1,905 2,030 2,183 477 1000 800 432 483 500 600 0 400 Mar '19 Mar '20 Mar '21 200 0 Mar '19 Mar '20 Mar '21 Ne
Slide 15: Return and Capital Adequacy Ratios
Return and Capital Adequacy Ratios Return on Equity (%) (after tax) Return on Assets (%) (after tax) 0.70% 9.00% 8.53% 0.64% 8.00% 7.35% 7.65% 0.60% 0.57% 0.53% 7.00% 0.50% 6.00% 5.00% 0.40% 4.00% 3.00% 0.30% 2.00% 0.20% 1.00% 0.00% 0.10% Mar '19 Mar '20 Mar '21 0.00% Mar '19 Mar '20 Mar '21 Capital
Slide 16: Productivity ratios
Productivity ratios Operating Profit per employee (` lakh) * Operating Profit per branch (` lakh) * 23.74 233.00 25 19.48 17.52 250 195.37 20 173.42 200 15 150 10 100 5 0 50 Mar '19 Mar '20 Mar '21 * annualized 0 Mar '19 Mar '20 Mar '21 Business per employee (` crs) Business per branch (` crs) 20 14
Slide 17: Provisions
Provisions Provisions & Contingencies Provision Coverage Ratio 100% Investments Others 90% 6.36% -0.29% 80% 70.05% 64.70% Tax 70% 58.45% 8.53% 60% 50% 40% Standard 30% Advances 20% 2.94% 10% 0% NPA Mar '19 Mar '20 Mar '21 Fair Value 80.93% 1.52% Segment wise PCR (Mar’21) 100% 90% 80% 70% As on 31.03
Slide 18: Business size
Business size Business Turnover (` crs) 1,23,280 1,28,749 1,27,349 120000 56,964 51,694 54,828 100000 80000 60000 71,785 75,655 68,452 40000 20000 0 Mar '19 Mar '20 Mar '21 Deposits Advances 17
Slide 19: Deposits
Deposits Deposits (` crs) 16% Growth rate 14% 12% 68,452 71,785 75,655 10% 14.06% 14.80% 8% 1.63% 0.07% 0.01% 9.17% 6% 8.88% 8.04% 5.92% 4% 1.65% 5.39% 4.87% 70.31% 71.02% 68.50% 2% 0% CASA deposit Retail term deposit Total deposit 31.49% Mar '19 Mar '20 Mar '21 28.06% 28.91% Mar '19 Mar '20 Mar '21
Slide 20: Deposits
Deposits NRI Deposits (` crs) NRI deposits 5.84% 5000 7% 4,196 4,438 4,418 4500 6% 4000 6.13% 6.18% 3500 5.84% 5% 3000 4% 2500 3% 2000 1500 2% 1000 Domestic 1% 500 deposits 0 0% 94.16% Mar '19 Mar '20 Mar '21 Amount % to total deposits 19
Slide 21: Advances
Advances Growth rate Advances [Net] (` crs) 27.00% 17.00% 28.12% 54,828 56,964 51,694 16.03% 12.15% 11.44% 10.64% 9.77% 7.00% Corporate 13.22% 3.90% 5.99% 6.91% 25.80% Advances 30.30% -11.26% 33.79% -3.00% Retail advances Mid Corporate Total Advances advances 26.85% 28.71% -9.25% -13.00% 45.49% 52.9
Slide 22: Top Credit Sectors
Top Credit Sectors Position As on 31.03.2021 (` crs) Sectors Total NPA SMA 2 # Balance % to GBC O/S Amount %* Amount %* MSME 14,653.55 27.79% 979.17 6.68% 593.40 4.05% Housing Loans 9,427.18 17.88% 290.18 3.08% 224.26 2.38% (Residential Mortgage) Agriculture 9,071.32 ** 17.20% 602.39 6.64% 148.87 1.
Slide 23: Advances under GECL
Advances under GECL Advances under GECL (1.0 & 2.0) as on 31.03.2021 SMA1 * SMA2 * Amount No. of Accounts % to GBC (Amount in crore (Amount in crore (Bal. o/s in crore) & %) & %) 10.03 5.05 9,492 2,198.94 4.17% 0.52% 0.26% * Including main and related accounts and both less than ` 5 crore & more tha
Slide 24: Restructured loans & related accounts
Restructured loans & related accounts (` crs) 1,738 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 Of which, NPA Opening balance 503.74 536.49 601.28 644.57 689.80 536.49 407 Related a/cs Addition 60.62 102.15 77.59 86.22 1100.54 1366.50 Restructured loans Reduction 27.87 37.36 34.30 40.99 51.93 164.58 Closi
Slide 25: External rating wise Advances
External rating wise Advances External rating wise Credit Portfolio as of Mar’21 Of which, NPA SMA2 Restructured book No of Balance O/s Rating Borrowers % to GBC no. of no. of Bal o/s no. of Bal o/s % share to (in cr) Bal o/s (cr) borrowers borrowers (cr) borrowers (cr) Std. Adv. * AAA 13 (24) 2,653
Slide 26: NBFC portfolio
NBFC portfolio NBFC Portfolio as of Mar ‘21 [ Figures in brackets – as of Mar ‘20] * Under respective rating category Of which, NPA SMA2 Restructured book No of Balance O/s Rating % to GBC no. of no. of Bal o/s no. of Bal o/s % share to Borrowers (in cr) Bal o/s (cr) borrowers borrowers (cr) borrowe
Slide 27: Top 50 borrowers
Top 50 borrowers Top 50 borrowers as of Mar ‘21 [ Figures in brackets – as of Mar ‘20] * Under respective rating category Of which, NPA SMA2 Restructured book No of Balance O/s Rating % to GBC no. of no. of Bal o/s no. of Bal o/s % share to Borrowers (in cr) Bal o/s (cr) borrowers borrowers (cr) bor
Slide 28: Advances to Priority sectors
Advances to Priority sectors Priority Sector Advances (` crs) Agriculture Advances (` crs) 60% 35000 52.83% 21% 9,071 10000 47.57% 48.13% 28,617 30000 18.38% 8,568 50% 19% 9000 25,094 17.19% 7,082 8000 21,878 46.58% 25000 17% 6,583 6,878 40% 20,594 43.89% 7000 44.17% 15% 5,837 17.64% 16,150 17,239 2
Slide 29: CD Ratio & Yield on Advances
CD Ratio & Yield on Advances Credit Deposit ratio (%) CD Ratio Incremental CD Ratio [Annual] 135.76% 80.10% 79.35% 100% 64.09% 68.33% 80% 60% 40% 20% 0% -20% Mar '19 Mar '20 Mar'21 -40% -60% -80% Yield on Advances & Interest Spread (%) -100% -136.20% Yield on advances Interest spread 9.33% 9.47% 9.0
Slide 30: Asset Quality
Asset Quality Gross NPAs (` crs) 6% 4.82% 4.91% 3000 5% 4.41% 2500 2,588 2,800 4% 2000 2,456 3% 1500 2% 1000 1% 500 Net NPAs (` crs) 0% 0 Mar '19 Mar '20 Mar'21 3.50% 2.95% 3.08% 3.18% 2000 Gross NPA Gross NPA % 1800 3.00% 1600 2.50% 1400 1,642 2.00% 1200 1,617 1000 1,755 1.50% 800 1.00% 600 400 0.5
Slide 31: Asset Quality
Asset Quality Composition of NPA Size wise NPA Above Rs 50 Cr Loss 4.34% Assets (1.57%) 7.39% Rs 5 Cr to Sub Rs 50 Cr Upto Rs 1 Standard 26.25% Cr 39.95% (5.46%) 44.95% Doubtful (4.94%) 52.66% Rs 1 Cr to Rs 5 Cr 24.46% (6.74%) Credit portfolio wise NPA Corporate (> 100 crore) 3.91% (1.45%) Mid Corpo
Slide 32: Asset Quality
Asset Quality (` crs) FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 Opening GNPA 2376.07 2456.38 2437.53 2594.27 2777.46 2456.38 2799.93 2557.64 2188.80 1706.57 2799.93 Addition 1447.86 526.02 530.95 637.54 304.07 1998.58 166.84 2.21 1.40 1175.92 1346.37 Fresh slippages 1415
Slide 33: Asset Quality
Asset Quality Top 25 NPA accounts & provisions held thereon (Mar ‘21) NPA Classification No. of Borrowers Net Balance Provision Held Provision % SS 4 (12) 59.80 (699.38) 9.70 (156.73) 16.23 (22.41) DS1 12 (8) 267.89 (257.39) 94.72 (108.18) 35.36 (42.02) DS2 6 (2) 183.32 (55.66) 103.56 (27.30) 56.49
Slide 34: SMA accounts
SMA accounts SMA2 (` crs) SMA1 (` crs) 3.50% 2000 2.99% 1800 7.00% 4000 3.00% 2.64% 1600 5.96% 6.00% 3500 2.50% 1400 2.16% 1200 3000 5.00% 2.00% 4.26% 4.14% 1000 2500 1,737 1,393 * 1.50% 4.00% 800 2000 1.00% 1,200 600 3.00% 3,457 400 2,375 ** 1500 0.50% 200 2.00% 2,181 1000 0.00% 0 1.00% 500 Mar '19
Slide 35: Investments
Investments Investments [excl. RIDF] (` crs) AFS 21,635 22.09% 25000 16,185 17,545 HFT 20000 0.00% 15000 10000 5000 HTM 77.91% 0 Mar '19 Mar '20 Mar'21 Yield on Investments (%) 8% 7% 6.92% 6.83% 6.11% 6% Duration 5% 4% AFS HFT HTM TOTAL 3% 3.57 0.00 5.86 5.43 2% 1% 0% Mar '19 Mar '20 Mar'21 34
Slide 36: Topline numbers
Topline numbers ` crs Mar-21 Dec ‘20 Mar-20 Mar-19 Total Deposits 75,655 73,826 71,785 68,452 CASA Deposits 23,823 22,199 20,752 19,215 Retail Deposits 51,822 51,605 50,980 48,125 Wholesale Deposits 10 23 54 1,113 Total Advances 51,694 53,187 56,964 54,828 Priority Sector Advances 28,617 27,848 25,0
Slide 37: Headline numbers
Headline numbers ` crs Mar-21 Mar-20 Mar-19 Dec-20 [12 months] [12 months] [12 months] [9 months] Interest Income 6,232 6,475 5,906 4,815 Interest Expense 4,049 4,445 4,001 3,091 Net Interest Income 2,183 2,030 1,905 1,724 Fee Income 870 862 839 521 Treasury Income 625 400 163 600 Non-Interest Incom
Slide 38: Headline numbers
Headline numbers ` crs Mar-21 Mar-20 Mar-19 Dec-20 [12 months] [12 months] [12 months] [9 months] Interest Income Interest Income 6,232 6,475 5,906 4,815 Interest on Advances 4,937 5,156 4,698 3,864 Interest on Investments 1,142 1,160 1,106 839 Other interest 153 159 102 112 Yield on Advances 9.05%
Slide 39: Capital Adequacy
Capital Adequacy RS IN CRS 31.03.2021 31.03.2020 31.03.2019 Risk Weighted Assets 49,759.61 52,708.33 47,880.21 Risk Weighted Assets Total Capital Fund (Basel III) 7,387.05 6,789.35 6,484.63 47,880 52,708 49,760 Total Tier I Capital 6,140.39 5,619.43 5,349.35 8.62% 9.10% 10.89% 3.96% 3.43% 6.34% Paid
Slide 40: Share holders’ value
Share holders’ value Share holding pattern (Mar ‘21) Earning Per Share (`) Others Banks, FIs, 5.28% MF, 15.35 15.52 Insurance 13.89 Cos 17.00 5.85% 15.00 13.00 11.00 9.00 Indian Public Foreign 7.00 79.47% Portfolio 5.00 Investors Mar '19 Mar '20 Mar'21 9.40% Book value (`) Dividend 204.71 213.67 35%
Slide 41: Digital capabilities
Digital capabilities Migration to Digital Channel [share of ADC transactions to total CBS transactions] 90.66% 100% 83.50% 90% 77.86% 80% 65.34% 70% 53.06% 60% 50.41% 50% 40% 30% 20% 10% 0% Mar '16 Mar '17 Mar '18 Mar '19 Mar '20 Mar '21 40
Slide 42: Mobile Banking
Mobile Banking No. of Registered users (Actuals) 12,60,932 11,36,380 9,95,370 8,37,756 7,09,402 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Value of Transactions (in Cr) No. of Transactions (in 000’s) Avg. value of Transactions per day (in Cr) 96 Avg. Transactions per day (in 000’s) 64 58 84 72 49 5,748 61 5
Slide 43: Debit Cards
Debit Cards Total cards issued (Lakhs) Debit cards Penetration Penetration (%) 86.88 86.20 86.25 85.43 50.09 49.90 83.95 49.21 47.75 45.15 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Total ATM transactions by our Debit Card holders Shared Network (VISA/NFS) (lakhs) KBL ATM (lakhs) Cards Usage 113 115 102 96
Slide 44: UPI transactions
UPI transactions 1374 BHIM KBL UPI Txns count No. of Transactions (in 000's) 1225 Avg. Transactions per day (in 000's) 748 807 1,23,647 1,12,709 621 74,280 68,797 57,147 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Value of Transactions (in Crore) 261 BHIM KBL UPI Txn Value Avg. value of Transactions per day
Slide 45: POS & ECOM transactions
POS & ECOM transactions 65 Txn ('000s) 66 Amt (Crore) 9 per day ('000s) 61 9 8 per day (Crore) POS Transactions 50 7 33 5 847 810 5932 5895 5607 734 625 4597 410 2980 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 36 Txn ('000s) 4 Amt (Crore) 4 Per day ('000s) 35 Per day (Cror
Slide 46: KBL-Vikaas – Bank’s Transformation Journey
KBL-Vikaas – Bank’s Transformation Journey DCoE : Accelerating Digital & Transformation Outcomes: Adoption : Accelerating Xpress Digital Portfolio : Risk Reduction : Improving Asset Quality ( > Cibil V3 701 Score portfolio): Experience driven by Net Promoter Score (NPS=42) & Improving CSAT : Digi Sa
Slide 47: Strong foundation of digital capabilities and enablers
Strong foundation of digital capabilities and enablers Internet Banking Mobile Banking KBL BHIM UPI KBL- mPassBook … Achievement Best in class Adoption rates • 75%+ adoption in March'21 for both car and home loans Xpress Home Loan Xpress Car Loan Xpress Cash Loan • 55%+ adoption in March’21 for MSME
Slide 48: Sustainability driven by Digital Tools
Sustainability driven by Digital Tools Sales and Other management tools Document Management Lead Management Collection activities E-Connect NPA Management e –Ticket System System Loan Payment tool Management Portal System Performance management and review tools Digital calling tool Automated Busines
Slide 49: KBL – VIKAAS: Impact on Key Parameters
KBL – VIKAAS: Impact on Key Parameters March ‘21 March ‘20 March ‘19 March ‘18 PCR 70.05% 64.70% 58.45% 54.56% PCR for NPAs of Rs 25 cr & above 93.78% 75.25% 70.30% 60.57% CRAR 14.85% 12.88% 13.54% 12.04% Operating Profit (in crore) 1,999.14 1,656.77 1,449.81 1,473.17 Turnover per Branch (in crore)
Slide 50: KBL – VIKAAS: Impact on Key Parameters
KBL – VIKAAS: Impact on Key Parameters March ‘21 March ‘20 March ‘19 March ‘18 CASA 31.49% 28.91% 28.06% 27.98% Digital transactions 90.66% 83.50% 77.86% 65.34% Retail: Mid Corporate: Large Corporate (%) 53 : 34 : 13 45 : 29 : 26 43 : 27 : 30 45 : 28 : 27 Digital underwriting of: Home loans 71% 32%
Slide 51: Business Strategy
Business Strategy Co i 50.
Slide 52: Corporate Goal for 2021-22
Corporate Goal for 2021-22 Risk Management Dept to be covered under 10 Further ‘QMSS-ISO 9001’ strengthening of 09 sales verticals On-boarding 2nd vendor for Contact Construction of an Centre activities 08 iconic building ‘KBL 07 Centenary Tower’ Setting up of ACOE 06 (Analytical Centre of Excellenc
Slide 53: Roadmap – Upcoming Digital Lanes
Roadmap – Upcoming Digital Lanes • KBL Xpress SB Account Self Journey (Aadhar based e-KYC, Quick Self A/C’s & VCIP ) Xpress • Retail/Mortgage Loan Digitisation of New Products (Mortgage OD / Contractor Mitra etc ) Journey • End to End Digi Journey Enhancements (Valuation, Legal & BIR Automation, eNA
Slide 54: Business Strategy
Business Strategy CASA deposits Digital Banking initiatives Focusing on customer onboarding to Focusing on digital marketing of Bank’s increase CASA as well as cross selling products & services RSE approach to CASA marketing. Digital loan sanctions for HL, PL, Auto SB account opening throu
Slide 55: Corporate Social Responsibility
Corporate Social Responsibility Barricading & Garden - Developed & Maintained by Karnataka Bank @ NH 66 from KPT Circle to Mahaveera Circle. Courtesy: National Highways Authority of India, Mangaluru. Financial assistance to install two cardiac ventilators at Rangadorai Memorial Hospital, Bengaluru.
Slide 56: Board of Directors
Board of Directors P Jayarama Bhat Mahabaleshwara M S Non Executive Chairman Managing Director & CEO D. Surendra Kumar, Rammohan Rao Belle Keshav Krishnarao Desai Shri Kshethra Dharmastala, Bengaluru Hubballi Dakshina Kannada Former MD & CEO, SBI Gen. Businessman Insu. Co. Ltd Educationist B R Ashok
Slide 57: Thank You
WE EXPRESS OUR HEARTFELT GRATITUDE TO ALL OUR STAKE HOLDERS FOR THEIR TRUST & SUPPORT AND SOLICIT THEIR CONTINUED PATRONAGE, AS WE CONTINUE OUR JOURNEY WITH RENEWED DEDICATION & Thank You COMMITMENT TO MAKE OUR BELOVED KARNATAKA BANK “A DIGITAL BANK OF THE FUTURE”. 56
Slide 58: 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