Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q2 FY2022 Earnings Presentation
59 slides from Karnataka Bank's earnings presentation, Oct 29, 2021
Slide 1: Exchange filing cover letter - revised presentation
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 October 29, 2021 HO/ SEC/ 148 / 2021-22 To: The Manager The General Manager
Slide 2: Analysis of Financial Results September 2021
Analysis of Financial Results September 2021
Slide 3: Table of contents
Table of contents 1 Highlights 2 Company Overview 3 Financial Performance 4 Business Strategy 2
Slide 4: Highlights – Q2 FY22
Highlights – Q2 FY22 3 Months 6 Months KPAs Q2 FY 22 Q2 FY 21 Y-o-Y Q1 FY 22 H1 FY 22 H1 FY 21 Y-o-Y (₹ crs) Turnover 131389 127028 3.43% 128006 131389 127028 3.43% Asset size 89216 83389 6.99% 86506 89216 83389 6.99% Operating profit 389.44 447.17 -12.91% 384.65 774.09 1102.88 -29.81% Net profit 12
Slide 5: KBL – VIKAAS: Impact on Key Parameters
KBL – VIKAAS: Impact on Key Parameters Particulars Sept ‘21 June ‘21 March ‘21 March ‘20 March ‘19 March ‘18 PCR 71.75% 72.24% 70.05% 64.70% 58.45% 54.56% PCR for NPAs of Rs 25 cr & above 95.88% 96.84% 93.78% 75.25% 70.30% 60.57% CRAR 14.48% 14.58% 14.85% 12.88% 13.54% 12.04% Operating Profit (in cr
Slide 6: KBL – VIKAAS: Impact on Key Parameters
KBL – VIKAAS: Impact on Key Parameters Particulars Sept ‘21 June ‘21 March ‘21 March ‘20 March ‘19 March ‘18 CASA 30.88% 30.82% 31.49% 28.91% 28.06% 27.98% Digital transactions 91.86% 91.63% 91.07% 83.50% 77.86% 65.34% Retail: Mid Corporate: Large 50: 33 : 17 52 : 34 : 14 53 : 34 : 13 45 : 29 : 26 4
Slide 7: 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 8: History
History Laid Foundation Stone for Centenary Building of the Bank Digital Transformation- Kbl Nxt journey commenced Wholly owned non-financial subsidiary of the Bank, KBL Services Ltd, started its operation. Initiated Bank’s transformation journey KBL-VIKAAS & Digital journey for retail and M
Slide 9: Evolution
Evolution • Business Turnover of ₹ 1,31,390 crore for the quarter ended 30.09.2021. ₹ 1,31,390 Cr business • 2,288 service outlets with 857 branches, turnover one Extension Counter, 952 ATMs and 479 recyclers across India as on 30.09.2021. All 2,288 36 e-Lobbies & 428 mini e-Lobbies Outlets all empo
Slide 10: 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 50 26% 25 17 25 7 41 538 1 Branches ATMs Recyclers 50 21 1016 1200 1001 952 859 858 857 1000 Has the strongest presence in South India 800 471 477 479 with 676 branches
Slide 11: Robust technology and digital platforms
Robust technology and digital platforms Strong technology platform Launch of KBL Fastag The existing “ISO 27001:2013” certificate encompassing Digital sanction of Home the Information Security Management System (ISMS) at loans, Personal loans, Car the Bank’s Data Centre/ IT Cell, Near line Site [NLS
Slide 12: KBL- DCoE: Accelerating Digital Transformation Catalyst
KBL- DCoE DCoE : Accelerating Digital Transformation Catalyst C: Cost Optimization A: Adoption R : Risk Profile E : Experience 11
Slide 13: 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 ₹ 25 lakh are rated borrower-wise and 2 credit facilities below ₹ 25 lakh & all schematic advances including agri-credit proposals are
Slide 14: Financial Performance
Financial Performance 13 13
Slide 15: Financial strength of the Bank
Financial strength of the Bank Networth (₹ crs) 6,642 6,818 8000 6,476 6000 6,507 4000 6,165 6,331 2000 311 311 311 0 Sep '20 Mar '21 Sep '21 Capital Reserves 14
Slide 16: Income & Profit - Quarterly
Income & Profit - Quarterly Net Income (₹ crs) Operating and Net Profit (₹ crs) 900 852 832 808 447 800 700 277 171 450 390 600 373 400 350 500 300 213 400 250 300 575 637 200 119 126 200 459 150 31 100 100 0 50 Sep '20 Mar '21 Sep '21 0 Sep '20 Mar '21 Sep '21 Net Interest Income Other Income Total
Slide 17: Return and Capital Adequacy Ratios
Return and Capital Adequacy Ratios Return on Equity (%) (after tax) Return on Assets (%) (after tax) 12.00% 0.80% 0.75% 10.15% 0.70% 10.00% 0.57% 7.65% 0.60% 0.53% 8.00% 6.89% 0.50% 6.00% 0.40% 4.00% 0.30% 2.00% 0.20% 0.00% 0.10% Sep '20 Mar '21 Sep '21 0.00% Sep '20 Mar '21 Sep '21 Capital Adequacy
Slide 18: Productivity ratios
Productivity ratios Operating Profit per employee (₹ lakh) * Operating Profit per branch (₹ lakh) * 26.20 30 256.78 20.62 300 25 18.30 202.42 20 250 180.74 200 15 10 150 5 100 0 50 Sep '20 Mar '21 Sep '21 * annualized 0 Sep '20 Mar '21 Sep '21 Business per employee (₹ crs) Business per branch (₹ crs
Slide 19: Provisions
Provisions Provisions & Contingencies during the quarter Provision Coverage Ratio 100% Investments Others NPA 90% 3.79% -0.04% 10.12% 80% 75.44% 70.05% 71.75% Tax 70% 7.88% Fair Value 60% 15.68% 50% 40% Sep '20 Mar '21 Sep '21 Standard Advances 62.57% Segment wise PCR (Sep’21) 100% 90% 80% 70% 60% A
Slide 20: Business size
Business size Business Turnover (₹ crs) 1,27,028 1,27,349 1,31,390 120000 54,099 51,694 54,468 100000 80000 60000 75,655 76,922 72,929 40000 20000 0 Sep '20 Mar '21 Sep '21 Deposits Advances 19
Slide 21: Deposits
Deposits Deposits (₹ crs) 16% Growth rate (y-o-y) 14% 12% 75,655 76,922 72,929 10% 14.80% 0.04% 0.01% 0.01% 11.65% 8% 10.56% 6% 2.98% 5.48% 4% 5.39% 70.79% 68.50% 69.12% 1.65% 0.00% 3.90% 2% 0% CASA deposit Retail term deposit Total deposit 29.17% 31.49% 30.88% Sep '20 Mar '21 Sep '21 Sep '20 Mar '2
Slide 22: Deposits
Deposits NRI Deposits (₹ crs) 5000 7% NRI 4,457 4,418 4500 4,402 deposits 6% 4000 5.72% 6.11% 3500 5.84% 5.72% 5% 3000 4% 2500 3% 2000 1500 2% 1000 Domestic 500 1% deposits 0 0% 94.28% Sep '20 Mar '21 Sep '21 Amount % to total deposits 21
Slide 23: Advances
Advances Growth rate (y-o-y) Advances [Net] (₹ crs) 27.00% 54,099 51,694 54,468 17.00% 16.52% 6.91% 0.83% Corporate 8.53% 1.15% 1.63% 5.99% 17.95% 13.22% 17.46% 7.00% 1.18% Advances 33.79% 32.63% -3.00% Retail advances Mid Corporate Corporate Total Advances 32.53% -1.94% advances advances -19.64% -9
Slide 24: Top Credit Sectors
Top Credit Sectors (₹ crs) Position as on 30.09.2021 NPA SMA 2 # Particulars Total Due to Due to % to GBC % Total balance o/s Amount % financial other to sector Amount reasons reasons MSME 16979.45 30.54 1191.11 7.02 681.49 4.47 294.47 387.02 Housing Loans (Residential 8616.24 15.50 264.20 3.07 224.
Slide 25: Restructured loans & related accounts
Restructured loans & related accounts 4,353 Of which, NPA 1,021 Related a/cs Restructured loans Movement in Restructured Portfolio (₹ crs) Q2FY21 Q3FY21 Q4FY21 FY21 Q1FY22 Q2 FY22 Opening balance 601.28 644.57 689.80 536.49 1,738.41 2617.24 1,738 Addition 77.59 86.22 1100.54 1366.50 968.16 1814.02 R
Slide 26: Restructured loans & Stress position
Restructured loans & Stress position (₹ crs) Total Out of which Out of which Out of which Restructured SMA-1 SMA-2 NPA Particulars No of No of No of Amount No of Amount Accounts Amount Accounts Amount Accounts Accounts RF-1 2316 1348.65 115 27.03 273 194.56 190 56.66 RF-2 7718 2390.02 452 119.92 457
Slide 27: External rating wise Advances
External rating wise Advances External rating wise Credit Portfolio as of Sep’21 [ Figures in brackets – as of Sep’20] 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) borrow
Slide 28: NBFC portfolio
NBFC portfolio NBFC Portfolio as of Sep ‘21 [ Figures in brackets – as of Sep ‘20] 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) borrowers (cr) Std. Adv. * AAA 14 (14) 3,7
Slide 29: Top borrowers
Top 50 borrowers Top 50 borrowers as of Sep ‘21 [ Figures in brackets – as of Sep‘20] 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) borrowers (cr) Std. Adv. * AAA 7 (13) 2
Slide 30: Advances to Priority sectors
Advances to Priority sectors Priority Sector Advances (₹ crs) Agriculture Advances* (₹ crs) 60% 35000 52.83% 9,319 48.13% 28,617 28,693 29,584 21% 9,071 8,931 10000 50% 30000 50.47% 18.38% 8,568 44.17% 25,094 19% 17.64% 9000 48.93% 7,082 8000 21,878 46.58% 25000 17% 6,583 6,878 40% 20,594 7000 15.90
Slide 31: CD Ratio & Yield on Advances
CD Ratio & Yield on Advances Credit Deposit ratio (%) CD Ratio Incremental CD Ratio [Annual] 74.18% 68.33% 70.81% 100% 80% 60% 23.02% 40% 9.24% 20% 0% -20% Sep '20 Mar '21 Sep '21 -40% -60% -80% Yield on Advances & Interest Spread (%) -100% -136.20% Yield on advances Interest spread 9.36% 9.05% 8.92
Slide 32: Asset Quality
Asset Quality Gross NPAs (₹ crs) Net NPAs (₹ crs) 4.91% 6% 3000 3.50% 3.00% 3.18% 1800 4.50% 2.84% 1600 5% 2500 3.00% 3.97% 1400 4% 2000 2.50% 2,501 2,588 1200 1,546 2.00% 1000 3% 1500 1,553 1,642 2,189 1.50% 800 2% 1000 600 1.00% 1% 500 400 0.50% 200 0% 0 0.00% 0 Sep '20 Mar '21 Sep '21 Sep '20 Mar
Slide 33: Asset Quality
Asset Quality Composition of NPA Size wise NPA Above Rs 50 Cr Loss 4.78% Assets 2.36% Upto Rs 1 Sub Cr Standard Rs 5 Cr to 40.75% Doubtful 55.74% 41.90% Rs 50 Cr 29.90% Rs 1 Cr to Rs 5 Cr 24.57% Credit portfolio wise NPA Corporate (> Mid Corporate (> 5 crore 100 crore) & upto 100 crore) 0% 35% Retai
Slide 34: Asset Quality
Asset Quality (₹ crs) Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 Q1FY22 Q2 FY22 Opening GNPA 2437.53 2594.27 2777.46 2456.38 2799.93 2557.64 2188.80 1706.57 2799.93 2588.41 2549.06 Addition 530.95 637.54 304.07 1998.58 166.84 2.21 1.40 1175.92 1346.37 414.24 445.36 Fresh slippages 49
Slide 35: Asset Quality
Asset Quality Top 25 NPA accounts & provisions held thereon -Sep ‘21 (₹ crs) NPA Classification No. of Borrowers Net Balance Provision held Provision % SS 5 (6) 97.06 (323.60) 14.56 (48.56) 15.00 (15.01) DS 1 9 (7) 156.37 (168.74) 70.47 (76.29) 45.07 (45.21) DS 2 10 (8) 250.67 (251.50) 165.43 (164.7
Slide 36: SMA accounts
SMA accounts SMA 2 (₹ crs) SMA 1 (₹ crs) 3.50% 1800 2.88% 4.50% 4.14% 2500 3.00% 1600 4.00% 2.64% 3.45% 1400 3.50% 2000 2.50% 1200 3.00% 2.00% 1500 1,600 1000 1,393 2.50% 2,181 1.50% * 800 2.00% 1,921 1000 0.91% 600 1.50% 1.00% 0.89% **500 501 400 1.00% 491 0.50% 200 0.50% 0.00% 0 0.00% 0 Sep '20 Ma
Slide 37: Investments
Investments AFS Investments [excl. RIDF] (₹ crs) 24.66% 22,851 HFT 21,635 19,956 0.00% 25000 20000 15000 HTM 75.34% 10000 5000 Duration 0 Sep '20 Mar '21 Sep '21 AFS HFT HTM TOTAL 3.43 0.00 5.69 5.15 Yield on Investments (%) 7% 6.26% 6.02% Liquidity Coverage Ratio 6% 5.81% 5% 350% 317.92% 4% 282.42%
Slide 38: Topline numbers
Topline numbers Q-o-Q Y-o-Y ₹ crs Sep-21 Jun-21 variation Sep-20 variation Total Deposits 76,922 76,215 0.93% 72,929 5.48% CASA Deposits 23,752 23,490 1.12% 21,275 11.65% Retail Deposits 53,165 52,720 0.84% 51,629 2.98% Wholesale Deposits 5 5 - 25 -80.00% Total Advances 54,468 51,791 5.17% 54,099 0.
Slide 39: Headline numbers
Headline numbers 3 Months 6 Months ₹ crs Q2 FY 22 Q2 FY 21 Y-o-Y % Q1 FY 22 H1 FY 22 H1 FY 21 Y-o-Y % Interest Income 1554.28 1603.71 -3.08 1523.50 3077.78 3219.41 -4.40 Interest Expense 917.18 1028.84 -10.85 948.71 1865.89 2109.43 -11.55 Net Interest Income 637.10 574.87 10.83 574.79 1211.89 1109.9
Slide 40: Headline numbers
Headline numbers 3 Months 6 Months ₹ crs Q2 FY 22 Q2 FY 21 Y-o-Y % Q1 FY 22 H1 FY 22 H1 FY 21 Y-o-Y % Interest Income Interest Income 1554.28 1603.71 -3.08 1523.50 3077.78 3219.41 -4.40 Interest on Advances 1169.77 1294.01 -9.60 1161.29 2331.06 2592.66 -10.09 Interest on Investments 334.15 273.35 22
Slide 41: Capital Adequacy
Capital Adequacy (₹ crs) Risk Weighted Assets Particulars 30.09.2021 30.06.2021 31.03.2021 30.09.2020 52,194 51,099 49,760 Risk Weighted Assets 51099.27 51,061.91 49,759.61 52194.16 10.38% 10.89% 11.29% Total Capital Fund (Basel 6.62% 6.34% 5.48% 7400.67 7,445.16 7,387.05 6824.81 III) Total Tier I C
Slide 42: Share holders’ value
Share holders’ value Share holding pattern (Sep ‘21) Earning Per Share (₹) Others 15.52 Indian Public 5.90% 16 79.35% 10.16 14 Banks, FIs, 12 7.44 MF, Insurance 10 Cos 8 5.65% 6 4 2 0 Foreign Sep '20 * Mar'21 Sep '21 * Portfolio * Not annualized Investors 9.10% Book value (₹ in Cr) Dividend 208.31 2
Slide 43: Digital capabilities
Digital capabilities Migration to Digital Channel [share of ADC transactions to total CBS transactions] 91.86% 91.63% 100% 90.66% 83.50% 90% 77.86% Digital Adoption 80% 65.34% 70% 53.06% 8.1% 60% 3.8% 50% 7.7% 40% 30% Sep’21 20% 10% 0% Mar '17 Mar '18 Mar '19 Mar '20 Mar '21 Jun'21 Sep'21 80.4% Digi
Slide 44: Mobile Banking
Mobile Banking No. of Regd users (Actuals as at the end of the quarter) 16,11,054 13,66,082 12,60,932 11,36,380 9,95,370 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Value of transactions during the quarter No. of transactions during the quarter 95.8 94.0 84.0 64 72.3 81.5 58 61 55 49 8,626 8,612 5,748 5,593
Slide 45: Debit Cards
Debit Cards Position during the quarter Debit cards Penetration 89.40% 88.42% 86.88% 51.55 86.25% 86.20% 50.34 50.09 49.90 49.21 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Total cards issued (Lakhs) Penetration (%) Total ATM transactions by our Debit Card holders Cards Usage 174 187 163 155 125 96 102 78 85
Slide 46: UPI transactions
UPI transactions Position during the quarter BHIM KBL UPI Txns count 1,610 1,374 1,225 1,331 1,48,148 807 1,23,647 1,21,076 1,12,709 74,280 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 No. of Transactions (in 000's) Avg. Transactions per day (in 000's) BHIM KBL UPI Txn Value 316 261 263 230 155 29,048 23,896
Slide 47: POS & ECOM transactions
POS & ECOM transactions Position during the quarter 66 70 9.0 9.4 9.0 61 60 60 POS Transactions 50 50 6.8 6.2 42 40 5,895 5,607 5,500 30 810 847 815 4,597 3,790 20 625 563 10 0 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 No. of Txn ('000s) Avg per day ('000s) Value of Txn (
Slide 48: Digital Lending
Digital Lending Banking on Digital First Approach…. Digital Adoption Customer Rating % of fresh sanctions 5 point Scale KBL Xpress Home Loans 60% 4.5 Risk Reduction Improving Asset 52% Quality KBL Xpress Car Loans 4.3 ( Cibil V3 >701 Score Portfolio) >76% KBL Xpress Cash 100% 4.2 55% 3.8 KBL Xpress
Slide 49: Strong foundation of digital capabilities and enablers
Strong foundation of digital capabilities and enablers Mobile Banking Internet Banking KBL BHIM UPI KBL- mPassBook Digital Channels Xpress Home Loan Xpress Car Loan Xpress Cash Loan Xpress Mortgage Loan Xpress lending Journeys Xpress MSME Term Loan CV Loan Xpress SB 48
Slide 50: Sustainability driven by Digital Tools
Sustainability driven by Digital Tools Digital calling tool Collection activities E-Connect Lead calling status Loan Payment tracking Portal 49
Slide 51: Annual Branch Customer Dashboard (ABCD)
Xpress Analytics Annual Branch Customer Dashboard Xpress Profile for Wallet Share (ABCD) X-PAWS (XPAWS) Information on branch finger tips Accelerating Quality Growth • Customer Profile & Segment • ADC Adoption & Usage • Products & Services Usage • Re-KYC and Contactability • ADC Adoption • CASA Shar
Slide 52: Business Strategy
Business Strategy Co i 51
Slide 53: 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 Digital sales verticals Transformation- Kbl Construction of an Nxt journey 08 iconic building ‘KBL 07 Centenary Tower’ Setting up of ACoE 06 (Analytical Centre of Excellence) 05 Impleme
Slide 54: Roadmap – Upcoming Lanes
Roadmap – Upcoming Lanes • Digital Insurance platform. Xpress • Valuation & BIR Automation in digital lending. Journey • DSA / BSA channel platform. • KBL Xpress Accounts : SB Quick, VCIP, Digital Re-KYC Digital • Marketing & Campaign Automation. Marketing • In-house Survey Tool for market research
Slide 55: 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 56: Corporate Social Responsibility
Corporate Social Responsibility Four wheeler vehicle donated for the malaria control programme of Udupi District Administration Two Ventilators donated by the Bank to Srinivas Hospital, Mukka, Surathkal Financial assistance to procure two plastic bailing machines with conveyor system for the Pachana
Slide 57: Board of Directors
Board of Directors P Jayarama Bhat Mahabaleshwara M S Non Executive Chairman Managing Director & CEO Keshav Krishnarao Desai Mrs Mythily Ramesh, Hubballi Bengaluru Businessman Justice A V Chandrashekar IT Professional and Co-Founder & Bengaluru CEO of NextWealth Former Judge, High Court of Karnataka
Slide 58: 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”. 57
Slide 59: 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