Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q2 FY25 Earnings Presentation
44 slides from Karnataka Bank's earnings presentation, Oct 23, 2024
Slide 1: Exchange filing cover letter
Karnataka Bank Ltd. Your Family Bank, Across India Regd. & Head Office Phone : 0824-2228184 P. B. No.599, Mahaveera Circle E-Mail : Comsec@ktkbank.com Kankanady Website : www.karnatakabank.com Mangaluru – 575 002 CIN : L85110KA1924PLC001128 SECRETARIAL DEPARTMENT 23.10.2024 HO:SEC:189:2024-25 To: 1.
Slide 2: Investor Presentation Q2 FY25
INVESTOR PRESENTATION Q2 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 Q2 FY25
Key Achievements During Q2 FY25 Beginning of transformative steps leading to stable financial position… Deposits and Advances Growth Stakeholder Value Asset Quality Gross Advances1 INR cr. 3.47% 3.54% 39.5% 3.21% 3.62% 3.54% 3.23% 26.0% 25.5% 1.66% 1.46% 37.4% 822 903 834 1.36% Growth: Q2FY24 Q2FY25
Slide 5: Q2 FY25 Performance at a Glance
Q2 FY25 Performance at a Glance Assets • Conscious reduction in opportunistic (PSU/Bulk) Gross Advances / Retail Advances Deposits CASA advances as rates were not favorable 75,316 / 36,712 99,968 30.82% • Retail advances grew by 4% 12.5% YoY 12.2% YoY 11.7% YoY 109 bps YoY QoQ from INR 35,313 crores
Slide 6: Q2 FY25 Performance at a Glance
Q2 FY25 Performance at a Glance Profitability* NII improved by 1.4% YoY (QoQ decreased 7.7%) on the back of increase in Interest Income to INR 2,234 Cr in Q2 FY25. Excluding one time IT refund of INR 81 Cr received in Q1FY25, QoQ NII growth would have been 1.5% NIM declined by 39 bps YoY to 3.23
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: Financial Highlights
Financial Highlights Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 10: Karnataka Bank at a Glance (Quarterly)
Financial Highlights Karnataka Bank at a Glance Particulars Q2FY25 Q1FY25 Growth Q-o-Q Q2FY24 Growth Y-o-Y Total Business 175,284 175,619 (0.2%) 156,468 12.0% Gross Advances / % Retail 75,316 / 48.7% 75,455 / 46.8% (0.2%) / 194bps 66,936 / 48.9% 12.5% / (15bps) Deposits 99,968 100,164 (0.2%) 89,532
Slide 11: Karnataka Bank at a Glance (Quarterly, continued)
Financial Highlights Karnataka Bank at a Glance Particulars Q2FY25 Q1FY25 Growth Q-o-Q Q2FY24 Growth Y-o-Y Fee Income or Commission Income 223 229 (2.6%) 197 13.3% Non-interest Income / Total Income 270 / 2,504 279 / 2,557 (3.3%) / (2.1%) 250 / 2,276 8.2% / 10.0% Credit Cost 0.09% 0.11% (2bps) 0.17%
Slide 12: Karnataka Bank at a Glance (Half Year)
Financial Highlights Karnataka Bank at a Glance Particulars H1FY25 H1FY24 Growth Y-o-Y FY24 Total Business 175,284 156,468 12.0% 171,059 Gross Advances / % Retail 75,316 / 48.7% 66,936 / 48.9% 12.5% / (15bps) 73,002 / 46.6% Deposits 99,968 89,532 11.7% 98,058 Retail Deposits 69,109 60,962 13.4% 66,6
Slide 13: Karnataka Bank at a Glance (Half Year, continued)
Financial Highlights Karnataka Bank at a Glance Particulars H1FY25 H1FY24 Growth Y-o-Y FY24 Fee Income or Commission Income 451 429 5.2% 928 Non-interest Income / Total Income 549 / 5,061 573 / 4,559 (4.3%) / 11.0% 1319 / 9,617 Credit Cost 0.20% 0.44% (24bps) 0.84% Slippage Ratio 0.9% 1.0% (9bps) 2.
Slide 14: Balance Sheet
Financial Highlights Balance Sheet Particulars H1FY25 H1FY24 Growth Y-o-Y FY24 Property & Assets Cash & Balance With Rbi 7,392.12 6,441.91 14.8% 7,656.07 Balance With Banks & Money At Call 445.37 443.63 1.0% 336.67 & Short Notice Investments 21,460.28 23,958.23 -10.4% 24,302.05 Advances 73,952.28 65
Slide 15: Profitability
Profitability Operating Revenue (INR Cr.) Other Income (INR Cr.) 4,618 4,178 549 3,445 79 419 25 326 94 250 32 279 81 47 62 44 6 445 1,154 1,253 1,182 1,103 1,072 293 194 201 226 (6) Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 FY22 FY23 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Fee / Commission Incom
Slide 16: Profitability
Profitability Net Interest Margin Non-Interest Income to Total Income 16.01% 3.70% 13.29% 12.09% 13.71% 13.37% 3.62% 3.54% 3.52% 3.48% 3.32% 10.97% 10.91% 3.20% 3.23% 10.78% FY22 FY23 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 FY22 FY23 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Return on Equity
Slide 17: Liability Profile
Liability Profile Deposit Profile (INR Cr.) 98,058 98,058 100,164 99,968 89,532 92,195 87,368 80,387 25,167 25,167 24,918 24,993 23,402 23,910 23,491 5,671 5,819 21,673 6,181 6,181 5,168 5,084 5,316 4,827 66,710 63,201 66,710 69,575 69,156 53,887 58,561 60,962 FY22 FY23 FY24 Q2 FY24 Q3 FY24 Q4 FY24
Slide 18: Advances
Advances Gross Advances Profile 1 (INR Cr.) Sectoral Loan Exposure 9.3% 20.3% Others 10.2% Housing Large Enterprises 75,455 75,316 6.8% 73,002 73,002 Other Personal 69,741 66,936 Loans 15.5% 3.6% 27% Agriculture 61,303 29% Infra 28% 28% 57,769 27% 25% 14.8% 20% NBFC 19.5% 20% MSME 24% 24% 26% 26% 26
Slide 19: Asset Quality
Asset Quality GNPA & NNPA Provision Coverage (Incl. & excl. TWO) 80.86% 79.22% 83.22% 80.75% 79.22% 80.14% 3.90% 3.74% 77.97% 3.53% 73.47% 3.47% 3.64% 3.53% 3.54% 61.75% 58.21% 3.21% 55.50% 56.21% 56.21% 53.97% 55.15% 2.42% 38.80% 1.70% 1.58% 1.55% 1.58% 1.66% 1.46% 1.36% FY22 FY23 FY24 Q2 FY24 Q3 F
Slide 20: Asset Quality: Restructured Portfolio
Asset Quality Restructured Portfolio GNPA & Restructured Assets (INR Cr.) Standard Restructured Portfolio – Break-up 11.0% 7.9% 5.7% 6.8% 6.3% 5.7% 5.4% 4.9% 3.7% 16.1% 6,366 Others Personal 23.9% Loans 2,251 4,864 MSME 2.0% 4,538 4,374 4,157 4,157 4,063 Agriculture 3,683 3.4% 2,293 6.5% CRE 2,324 2
Slide 21: Asset Quality: Movement of NPA
Asset Quality Movement of NPA Quarterly Annual Particular (INR Cr.) Q2 FY25 Q1 FY25 Q2 FY24 FY24 Opening Gross NPA 2,668.45 2,578.42 2,315.88 2,292.91 Additions 242.67 416.49 313.68 1,650.20 Sub Total ( A ) 2,911.12 2,994.91 2,629.56 3,943.11 Slippage ratio 0.33 0.59 0.52 2.80 Reduction Up-gradation
Slide 22: Asset Quality: Sector-wise Breakup Analysis
Asset Quality Sector-wise Breakup Analysis Gross Advances Breakup (INR Cr.) Non-Performing Assets Breakup (INR Cr.) Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 MSME 15,528 15,425 14,774 14,832 14,677 MSME 1,113 1,194 1,163 1,011 923 Agriculture 8,944 9,235 10,029
Slide 23: Efficiency Ratio
Efficiency Ratio Cost to Income Ratio 52.6% 53.2% 60.1% 58.3% 47.1% 53.2% 52.8% 51.3% FY22 FY23 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Business per Employee (INR Cr.) Staff Cost (INR Cr.) 1,373 * 20 20 19 19 1,069 19 1,015 18 17 437 307 336 320 350 16 FY22 FY23 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1
Slide 24: Key Ratios
Key Ratios Capital Adequacy Ratio Risk Weighted Assets (INR Cr.) 56.6% 53.9% 53.9% 54.7% 55.8% 53.9% 54.9% 54.8% 17.5% 18.0% 18.0% 17.6% 17.6% 15.7% 1.8% 16.2% 15.9% 1.8% 62,533 62,533 63,554 63,634 1.7% 1.7% 57,865 61,351 3.3% 53,378 3.0% 3.1% 2.2% 51,855 16.2% 16.2% 15.9% 15.9% 12.7% 14.2% 13.1% 1
Slide 25: Shareholder Value
Shareholder Value Shareholding Pattern EPS & Market Capitalisation 45.0 10,000 * 39.8 40.0 39.0 37.9 Others, Foreign 0.4% 8,94235.0 Institutions, 8,000 7,897 10.3% 30.0 Domestic 6,000 25.0 Institutions, 22.1% 20.0 Indian Body 4,000 Public, 15.5 4,238 15.0 Corporate, 13.9 59.6% 5.3% 1,899 NRIs, 2.3%
Slide 26: Accelerating our Transformation Journey
Accelerating our Transformation Journey Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 27: Targeted Performance Improvement to Boost Returns
Targeted Performance Improvement to Boost Returns Cost to Income %: 52.0% - 55.0% 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 %: 3.4% - 3.7% Consistent Interest Margins Cost of Fu
Slide 28: 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 Retail loans Liability Products ADC Channels Agri Schemes
Slide 29: Digital and Technology: Digital Touchpoints
Digital and Technology Digital Touchpoints 3,590,465 762,883 5,416,540 Mobile App Installations Net Banking Users Debit Cards 3.5% QoQ 1.9% QoQ 1.4% QoQ 100,964 1,632,014 1,505 QR related metrics E-Passbook Downloads ATM Networks 15.1% QoQ 0.3% QoQ 0.1% QoQ 28
Slide 30: Digital and Technology: Awards
Digital and Technology Awards Best Digital Transformation Best Business Innovation - IDC Initiative (Private Bank) Foundry IDC Foundry – CIO100 “Best Innovators with Gen AI & Cloud in Analytics 5th Annual BFSI Technology Excellence awards 2024 Hosted by Quantic Centre of Excellence 29
Slide 31: Moving towards a Digital-First Bank
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 32: Scalable and Reliable Architecture
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 33: Analytical Centre of Excellence - Business Adoption
Analytical Centre of Excellence - Business Adoption Propensity Engagement Distribution Branch Channel Digital Channel Non Managed Portfolio A/c’s Managed Portfolio A/c’s Campaigns Top Identified Campaigns All Campaigns BScore, Xsell – HL,VL,FD CASA – Assets Relationship Relationship Winback, M2M Xse
Slide 34: Best in class Analytics Factory: 360day PitStop
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 Live - Customer Live - Early Warning Signals Relationship Management (EWS) & Collection (CRM) & Custome
Slide 35: Our Strengths and Strategies
Our Strengths and Strategies Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 36: 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 37: 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 35.0% 46.4% ▪ Capitalise on community network ▪ MSME and Rur
Slide 38: 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 39: Key Capabilities in 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 40: 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 2 931 1,505 1 Branches ATM and Recyclers 3 16 7 20 5 Presence Across All Tiers 9 58 Top 5 States Rural 27 Karnataka 590 23.3% Metro 27.7% Maharashtra 58 7 45 590 Total
Slide 41: Creating a Performance Driven Culture
Creating a Performance Driven Culture B. Rebuild Outward-Facing, Business-Centric Teams Outbound sales team and “Feet on the Street” for growing Inducted 356 Sales Officers and 308 Feet on Ground for liabilities and expanding the home loan book covering key markets and target segments Better control
Slide 42: Digitalisation Propelling Robust Book Growth
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 43: Initiatives towards Digitisation
Digitalisation Propelling Robust Book Growth C. Initiatives towards Digitisation Executed initiatives Planned future initiatives for 2025 Colending partnership Pre-approved and National Back Office Hyperlocal SEO Flow-Based Loans Transformation expansion - UGro Core Systems Supply Chain / Trade (Col
Slide 44: 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