Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q3 FY2021 Earnings Presentation
55 slides from Karnataka Bank's earnings presentation, Jan 12, 2021
Slide 1: Investor Presentation Q3FY2021 cover letter
S Karnataka Bank Ltd. Yoiir Family 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 Mangaluru -575 002 CIN : L85110KA1924PLC001128 January 12, 2021 SECRETARIA
Slide 2: Analysis of Financial Results December 2020
Analysis of Financial Results December 2020
Slide 3: Table of contents
Table of contents 1 Company Overview 2 Financial Performance 3 Business Strategy 2
Slide 4: Highlights – Q3 FY21
Highlights – Q3 FY21 3 Months 9 Months KPAs Q3 FY 21 * Q3 FY 20 Q2 FY 21 * 9M FY 21 * 9M FY 20 (` crs) Turnover 1,27,014 1,26,267 1,27,028 1,27,014 1,26,267 Asset size 84,050 82,307 83,389 84,050 82,307 Operating profit 437.96 501.79 500.34 1,615.34 1,265.23 Net profit 135.37 123.14 119.35 451.10 40
Slide 5: Financial strength of the Bank
Financial strength of the Bank Networth (` crs) 6,133 5,970 6,611 6000 5000 4000 5,850 5,659 6,300 3000 2000 1000 283 311 311 0 Dec '19 Mar '20 Dec '20 Capital Reserves 4
Slide 6: Return and Capital Adequacy Ratios
Return and Capital Adequacy Ratios Return on Equity (%) (after tax) Return on Assets (%) (after tax) 0.80% 12.00% 0.71% 9.56% 0.70% 0.67% 10.00% 9.05% 7.35% 0.60% 0.53% 8.00% 0.50% 6.00% 0.40% 4.00% 0.30% 2.00% 0.20% 0.00% 0.10% Dec '19 Mar '20 Dec '20 0.00% Dec '19 Mar '20 Dec '20 Capital Adequacy
Slide 7: Productivity ratios
Productivity ratios Operating Profit per employee (` lakh) * Operating Profit per branch (` lakh) * 25.66 30 251.32 300 25 20.47 19.48 250 199.64 195.37 20 200 15 10 150 5 100 0 50 Dec '19 Mar '20 Dec '20 * annualized 0 Dec '19 Mar '20 Dec '20 Business per employee (` crs) Business per branch (` crs
Slide 8: Company Overview
Company Overview 01 96 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 9: History
History Initiated Bank’s transformation journey KBL-VIKAAS Digital journey for retail products Bonus issue in the ratio of 1:10 2017-20 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 10: Evolution
Evolution • Business Turnover of ` 1,27,014 crore as on 31.12.2020. ` 1,27,014 Cr business • 2,345 service outlets with 857 branches, turnover 1 Extension Counter, 1,014 ATMs and 473 recyclers in 554 centres across India as on 2,345 31.12.2020. And, all 37 e-Lobbies & 422 Outlets all mini e-Lobbies
Slide 11: 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 41 537 1 Branches ATMs Recyclers 50 21 1043 1026 1200 1014 845 848 857 1000 Has the strongest presence in South India 800 447 473 with 675 branches 60
Slide 12: Robust technology and digital platforms
Robust technology and digital platforms Strong technology platform The existing “ISO 27001:2013” certificate encompassing the Digital sanction of Home Information Security Management System (ISMS) at the loans, Personal loans, Car Bank’s Data Centre, Near line Site [NLS] at Bengaluru and loans, 2-wh
Slide 13: KBL-DCoE: Accelerating Digital Transformation Catalyst
KBL- DCoE DCoE : Accelerating Digital Transformation Catalyst C: Cost Opt A: Adoption R : Risk Profile E : Experience 12
Slide 14: 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 15: Financial Performance
Financial Performance 14 114
Slide 16: Income & Profit - Quarterly
Income & Profit - Quarterly Net Income (` crs) Operating and Net Profit (` crs) 1000 936 887 880 900 800 600 502 407 273 700 372 438 500 392 600 500 400 400 300 300 614 123 508 529 135 200 200 100 27 100 0 Dec '19 Mar '20 Dec '20 0 Dec '19 Mar '20 Dec '20 Net Interest Income Other Income Total Incom
Slide 17: Business size
Business size Business Turnover (` crs) 126,267 128,749 127,014 120000 54,911 56,964 53,188 100000 80000 60000 71,785 73,826 71,356 40000 20000 0 Dec '19 Mar '20 Dec '20 Deposits Advances 16
Slide 18: Deposits
Deposits Deposits (` crs) 16% Growth rate 14% 71,356 71,785 73,826 12% 13.57% 12.61% 0.11% 0.03% 10% 0.07% 8% 11.29% 9.54% 6% 8.04% 5.92% 72.49% 71.02% 69.90% 4% -0.24% 4.87% 3.46% 2% 0% CASA deposit Retail term deposit Total deposit -2% 27.39% 28.91% 30.07% Dec '19 Mar '20 Dec '20 Dec '19 Mar '20 D
Slide 19: Deposits
Deposits NRI Deposits (` crs) NRI deposits 6.01% 5000 4,447 7% 4,438 4,436 4500 6% 4000 6.23% 6.18% 3500 6.01% 5% 3000 4% 2500 3% 2000 1500 2% 1000 Domestic 1% 500 deposits 0 0% 93.99% Dec '19 Mar '20 Dec '20 Amount % to total deposits 18
Slide 20: Advances
Advances Growth rate Advances [Net] (` crs) 15.00% 13.74% 12.47% 10.47% 11.44% 10.64% 54,911 56,964 53,187 3.90% 5.00% 7.22% 5.68% Corporate Advances 15.47% Retail advances Mid Corporate Total Advances 25.19% -11.26% 25.80% -9.51% advances -3.14% -5.00% 33.10% 28.25% 28.71% -15.00% -40.41% 46.56% 45
Slide 21: Diversified Advances
Diversified Advances Segmentation of Gross Advances (Dec ‘20) CRE LRD (Non-CRE) Agriculture * Others 13.25% 4.24% 0.06% 12.81% NBFC ** 8.23% Micro-Small Ent. 22.28% Infra 2.74% Other Personal loans 4.59% Housing Medium Ent. 17.58% 3.91% Large Ent. 10.30% * However, this works out to 15.59% of the AN
Slide 22: Advances
Advances Movement of Moratorium book: June'20 Sept'20 Dec'20 Category O/s. O/s. O/s. Number- Number- Number- Amount- Amount- Amount- wise (%) wise (%) wise (%) wise (%) wise (%) wise (%) Advances under GECL as of Dec’20: Agri 22.35% 46.85% 5.61% 5.48% 0.13% 0.50% Sanctions Disbursement Micro Small 7
Slide 23: Advances
Advances External rating wise Credit Portfolio as of Dec ‘20 Of which, NPA SMA2 Moratorium 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 14 (19) 3,061 (5,981) 5.67 (10.74)
Slide 24: Advances
Advances NBFC Portfolio as of Dec ‘20 [ Figures in brackets – as of Dec ‘19] * Under respective rating category Balance Of which, NPA SMA2 Moratorium book No of % to Rating O/s no. of Bal o/s no. of Bal o/s no. of Bal o/s % share to Borrowers GBC (in cr) borrowers (cr) borrowers (cr) borrowers (cr)
Slide 25: Advances
Advances Top 50 borrowers as of Dec ‘20 [ Figures in brackets – as of Dec ‘19] * Under respective rating category Balance Of which, NPA SMA2 Moratorium book No of % to Rating O/s no. of Bal o/s no. of Bal o/s no. of Bal o/s % share to Borrowers GBC (in cr) borrowers (cr) borrowers (cr) borrowers (cr
Slide 26: Advances
Advances Priority Sector Advances (` crs) Agriculture Advances (` crs) 60% 52.83% 27,848 30000 47.57% 48.13% 25,094 21% 9,119 10000 50% 25000 18.38% 8,568 9000 21,878 19% 17.19% 20,594 7,082 8000 40% 47.61% 20000 17% 6,583 6,878 17,239 44.17% 43.89% 7000 16,150 15% 5,837 17.64% 15.81% 15.59% 6000 30
Slide 27: CD Ratio & Yield on Advances
CD Ratio & Yield on Advances Credit Deposit ratio (%) CD Ratio Incremental CD Ratio [Annual] 76.95% 79.35% 64.09% 72.04% 90% 70% 47.62% 50% 30% 10% -10% Dec '19 Mar '20 Dec '20 -30% -50% -70% -69.78% Yield on Advances & Interest Spread (%) Yield on advances Interest spread 9.49% 9.47% 9.38% 10% 8% 3
Slide 28: Asset Quality
Asset Quality Gross NPAs (` crs) 6% 4.82% 3000 4.99% 5% 2500 3.16% 2,800 4% 2000 2,777 3% 1500 1,707 2% 1000 1% 500 Net NPAs (` crs) 0% 0 Dec '19 Mar '20 Dec '20 4.00% 3.75% 3.08% 2500 Gross NPA Gross NPA % 3.50% 2000 3.00% 2.50% 1500 1.74% 2,058 2.00% 1,755 1.50% 1000 1.00% 500 924 0.50% 0.00% 0 De
Slide 29: Asset Quality
Asset Quality Composition of NPA Size wise NPA Above Rs 50 Cr Loss 29.09% Sub Upto Rs 1 Cr Assets Standard (3.37%) 31.30% 10.90% 11.45% (2.25%) Rs 5 Cr to Rs Rs 1 Cr to Rs Doubtful 50 Cr 5 Cr 77.64% 16.58% 23.03% (4.19%) (4.56%) Credit portfolio wise NPA Corporate (> 100 crore) 12.99% (2.65%) Retail
Slide 30: Asset Quality composition
Asset Quality composition Sectoral Exposures in NPA – Priority Sector Sectoral Exposures in NPA – Non-Priority Sector Personal & Commercial Others other loans real estate 3.00% 2.54% Other (0.53%) Agri & 7.76% (0.85%) personal (2.32%) allied loans Services Services activities 9.95% 28.63% 33.76% 41.
Slide 31: Asset Quality
Asset Quality Non Performing Assets For the period / Without proforma slippages With proforma slippages Particulars As on * Amount % age Amount % age 31.12.2020 1706.57 3.16 2133.95 3.95 Gross NPA 30.09.2020 2188.80 3.97 2278.95 4.13 31.12.2019 2777.46 4.99 31.12.2020 923.98 1.74 1287.25 2.42 Net NP
Slide 32: Asset Quality
Asset Quality (` crs) FY17 FY18 FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 Q3FY21 Opening GNPA 1180.40 1581.59 2376.07 2456.38 2437.53 2594.27 2777.46 2456.38 2799.93 2557.64 2188.80 Addition 1348.37 2119.87 1447.86 526.02 530.95 637.54 304.07 1998.58 166.84 2.21 1.40 Fresh slippages 2088.1
Slide 33: Asset Quality
Asset Quality Top 25 NPA accounts & provisions held thereon (Dec’20) NPA Classification No. of Borrowers Net Balance Provision Held Provision % SS 2 (16) 112.51 (858.81) 37.19 (128.89) 33.06 (15.01) DS1 14 (7) 295.96 (222.19) 108.27 (62.46) 36.58 (28.11) DS2 6 (2) 167.56 (56.71) 81.22 (28.22) 48.47
Slide 34: Restructured loans
Restructured loans Restructured loans & related accounts (` crs) 690 FY20 Q1FY21 Q2FY21 Q3FY21 Of which, NPA Opening balance 503.74 536.49 601.28 644.57 Related a/cs Addition 60.62 102.15 77.59 86.22 153 Restructured loans 537 Reduction 27.87 37.36 34.30 40.99 504 Closing balance 536.49 601.28 644.5
Slide 35: Investments
Investments Investments [excl. RIDF] (` crs) AFS 20,660 25000 20.05% 17,999 17,545 HFT 20000 0.00% 15000 10000 5000 HTM 79.95% 0 Dec '19 Mar '20 Dec '20 Yield on Investments (%) 8% 7% 6.71% 6.64% 6.02% 6% Duration 5% 4% AFS HFT HTM TOTAL 3% 4.18 0.00 6.04 5.75 2% 1% 0% Dec '19 Mar '20 Dec '20 34
Slide 36: Topline numbers
Topline numbers ` crs Dec-20 Sept-20 Mar-20 Dec-19 Total Deposits 73,826 72,929 71,785 71,356 CASA Deposits 22,199 21,275 20,752 19,546 Retail Deposits 51,605 51,629 50,980 51,728 Wholesale Deposits 23 26 54 82 Total Advances 53,187 54,099 56,964 54,911 Priority Sector Advances 27,848 26,970 25,094
Slide 37: Headline numbers
Headline numbers ` crs Dec-20 Dec-19 Sept-20 Mar-20 [9 months] [9 months] [6 months] [12 months] Interest Income 4,815 4,836 3,219 6,475 Interest Expense 3,091 3,335 2,109 4,445 Net Interest Income 1,724 1,501 1,110 2,030 Fee Income 521 610 338 862 Treasury Income 600 245 511 400 Non-Interest Income
Slide 38: Headline numbers
Headline numbers ` crs Dec-20 Dec-19 Sept-20 Mar-20 [9 months] [9 months] [6 months] [12 months] Interest Income Interest Income 4,815 4,836 3,219 6,475 Interest on Advances 3,864 3,839 2,593 5,156 Interest on Investments 839 870 551 1,160 Other interest 112 127 75 159 Yield on Advances 9.38% 9.49%
Slide 39: Provisions
Provisions Provisions & Contingencies Provision Coverage Ratio Investments Others 100% 3.57% -0.37% Tax 90% 10.21% 80.51% 80% 70% 64.70% Standard 59.34% Advances 60% 10.00% 50% NPA 75.82% 40% Fair Value Dec'19 Mar'20 Dec'20 0.77% 100% 90% COVID-19 Provision: Rs 147.99 crore as on 31.12.2020. 80% 70%
Slide 40: Capital Adequacy
Capital Adequacy RS IN CRS 31.12.2020 31.03.2020 31.12.2019 Risk Weighted Assets 50,863.16 52,708.33 51,701.90 Risk Weighted Assets Total Capital Fund (Basel III) 7,036.02 6,789.35 6,511.91 51,702 52,708 50,863 Total Tier I Capital 5,770.82 5,619.43 5,379.44 9.28% 9.10% 10.65% 3.80% 3.43% 6.35% Paid
Slide 41: Share holders’ value
Share holders’ value Share holding pattern (Dec ‘20) Others Banks, FIs, 6.37% MF, Insurance Earning Per Share (`) Cos 6.06% 14.51 15.00 13.89 14.50 Indian Foreign 14.00 13.01 Public Portfolio 13.50 79.45% Investors 13.00 8.13% 12.50 12.00 Dec '19 * Mar '20 Dec '20 * Book value (`) * Not annualized 1
Slide 42: Digital capabilities
Digital capabilities Migration to Digital Channel [share of ADC transactions to total CBS transactions] 88.77% 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 Dec '20 41
Slide 43: Mobile Banking
Mobile Banking No.of Regd users (Thousands) 1,136,380 995,370 837,756 709,402 605,760 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 No. of Transactions (in 000’s) Value of Transactions (in Cr) 84 Avg. Transactions per day (in 000’s) 58 Avg. value of Transactions per day (in Cr) 72 49 61 55 42 43 48 5,336 7772
Slide 44: Debit Cards
Debit Cards Total cards issued (Lakhs) Debit cards Penetration 86.25 86.20 Penetration (%) 85.43 83.95 50.09 49.21 82.26 47.75 45.15 43.32 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Total ATM transactions by our Debit Card holders Shared Network (VISA/NFS) (lakhs) KBL ATM (lakhs) Cards Usage 113 119 115 96
Slide 45: UPI transactions
UPI transactions BHIM KBL UPI Txns count No. of Transactions (in 000's) 1225 Avg. Transactions per day (in 000's) 807 687 748 112,709 621 74,280 68,797 63,236 57,147 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 230 Value of Transactions (₹ in Crore) BHIM KBL UPI Txn Value Avg. value of Transactions per day (₹
Slide 46: POS & ECOM transactions
POS & ECOM transactions Txn ('000s) per day ('000s) Amt (Crore) per day (Crore) 9.0 9.0 61 8.1 POS Transactions 69 65 50 6.8 5.0 6327 33 826 5932 810 5607 734 4597 625 2980 410 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Txn ('000s) Per day ('000s) Amt (Crore) Per day (Cror
Slide 47: Corporate Social Responsibility
Corporate Social Responsibility Donating a dedicated Ambulance to Dakshina Kannada District Administration to transport COVID-19 infected patients, in the fight against the pandemic. Sponsored newly constructed public bus shelter along the Mangaluru – Udupi National Highway NH-66 dedicated to Katpad
Slide 48: KBL-Vikaas – Bank’s Transformation Journey
KBL-Vikaas – Bank’s Transformation Journey As a part of Transformation journey, Launched OD facility against gold ornaments. Implemented Employee Satisfaction and Career Development System [ESCDS] and Key Result Area [KRA]. Introduced alternate source for leads generation, both for Launched
Slide 49: DCoE: Accelerating Digital & Transformation Outcomes for Q3
DCoE : Accelerating Digital & Transformation Outcomes for Q3: Adoption : Accelerating Xpress Digital Portfolio : Risk Reduction : Improving Asset Quality ( > Cibil V3 701 Score portfolio): Experience driven by Improving CSAT : Digi Sanction CSAT Score ( Max of 5 ) Xpress Loan June December Products
Slide 50: Business Strategy
Business Strategy Co i 49
Slide 51: Corporate Goal for 2020-21
Corporate Goal for 2020-21 C To introduce following B Other initiatives: Fully operationalizing A the wholly owned non- products & services: financial subsidiary – Digitization journey for KBL Services Ltd., many more retail loan On-boarding 2nd vendor products, Business for Contact Centre F
Slide 52: 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 53: 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 BANK OF THE FUTURE”. 52
Slide 54: Board of Directors
Board of Directors P Jayarama Bhat Mahabaleshwara M S Non Executive Chairman Managing Director & CEO Rammohan Rao Belle U R Bhat Keshav Krishnarao Desai Bengaluru Mumbai Hubballi Former MD & CEO, SBI Gen. Businessman Investment Adviser & Columnist Insu. Co. Ltd D. Surendra Kumar, B R Ashok Mrs Mythi
Slide 55: 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