Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q3 FY2022 Earnings Presentation
59 slides from Karnataka Bank's earnings presentation, Jan 29, 2022
Slide 1: Karnataka Bank Ltd. - Presentation cover letter to exchanges
$ 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 : L8511OKA1924PLC001128 SECRETARIAL DEPARTMENT January 29, 2022 HO/ S
Slide 2: Analysis of Financial Results December 2021
Analysis of Financial Results December 2021
Slide 3: Table of contents
Table of contents 1 01 Highlights Q3 FY22 Financial headline numbers, Key ratios with previous period comparisons, Impact of KBL-VIKAAS 02 Company Overview Evolution, Presence , Digital and Risk Management systems 03 Financial Performance Q3 FY22 Financial Results, Business numbers, Productivity rat
Slide 4: 01 Highlights
01 Highlights Financial headline numbers, Key ratios with previous period comparisons 3
Slide 5: Highlights
Highlights ₹ crs Deposit Advances 6.23 % 31.12.2021 31.12.2020 31.12.2021 31.12.2020 4.33 % 78429 73826 55489 53187 Investments Balance Sheet Size 6.44 % 31.12.2021 31.12.2020 31.12.2021 31.12.2020 8.22 % 12.26% 21991 20659 90958 84050 Net Profit (3 Months) Operating Profit (3 Months) 8.27 % 31.12.2
Slide 6: Headline numbers
Headline numbers 3 Months 9 Months (₹ crs) Q3 FY 22 Q3 FY 21 Q2 FY 22 Particulars Y-o-Y 31.12.2021 31.12.2020 Y-o-Y (31.12.2021) (31.12.2020) (30-09-2021) Turnover 133918 127014 5.44% 131390 133918 127014 5.44% Asset size 90958 84050 8.22% 89216 90958 84050 8.22% Operating profit 356.32 448.09 -20.4
Slide 7: KBL – VIKAAS: Impact on Key Parameters (1)
KBL – VIKAAS: Impact on Key Parameters …. (1) Particulars Dec ‘21 Sep ‘21 March ‘21 March ‘20 March ‘19 March ‘18 PCR % 73.74% 71.75% 70.05% 64.70% 58.45% 54.56% PCR for NPAs of Rs 25 cr & above 97.91% 95.88% 93.78% 75.25% 70.30% 60.57% CRAR % @14.15% @14.48% 14.85% 12.88% 13.54% 12.04% Operating Pr
Slide 8: KBL – VIKAAS: Impact on Key Parameters (2)
KBL – VIKAAS: Impact on Key Parameters ….(2) Particulars Dec ‘21 Sep ‘21 March ‘21 March ‘20 March ‘19 March ‘18 CASA % 31.30% 30.88% 31.49% 28.91% 28.06% 27.98% Digital transactions % 92.64% 91.86% 91.07% 83.50% 77.86% 65.34% Retail: Mid Corporate: Large 49: 32 : 19 50: 33 : 17 53 : 34 : 13 45 : 29
Slide 9: 02 Company Overview
02 Company Overview Evolution, presence, Digital and Risk Management systems Mission Statement Vision Statement "Our mission is to be a technology savvy, customer centric progressive bank with a national presence, driven by the “To be progressive, prosperous and well governed Bank” highest standards
Slide 10: Evolution
Evolution • Business Turnover of ₹ 1,33,918 crore for the quarter ended 31.12.2021. ₹ 1,33,918 Cr business • 2,291 service outlets with 859 branches, turnover one Extension Counter, 915 ATMs and 517 recyclers across India as on 31.12.2021. All 36 e-Lobbies & 465 mini 2,291 e-Lobbies empowered throug
Slide 11: Pan-India footprint
Pan-India footprint Area wise distribution of Branches Metro Urban Semi Urban Rural 21 7 2 4 23% 28% 8 1 9 10 1 2 3 16 7 20 23% 5 8 26% 50 25 17 25 Branches ATMs Recyclers 7 41 540 1 1200 1014 1001 50 857 915 21 858 859 1000 800 473 517 477 600 Has presence in South India with 678 branches 400 200 T
Slide 12: Robust technology and digital platforms
Robust technology and digital platforms The existing “ISO 27001:2013” certificate encompassing the Information Security Management System (ISMS) at Launch of KBL Fastag the Bank’s Data Centre/ IT Cell, Near line Site [NLS] and Information Technology Department including the DR Digital sanction of Ho
Slide 13: KBL- Digital Centre of Excellence
KBL- Digital Centre of Excellence DCoE : Accelerating Digital Transformation Catalyst C : Cost Optimization 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 ₹ 25 lakh are rated borrower-wise and 2 credit facilities below ₹ 25 lakh & all schematic advances including agri-credit proposals are
Slide 15: 03 Financial Performance
03 Financial Performance Financial Results, Business numbers, Productivity , Capital Adequacy ratios and Asset Quality 14
Slide 16: PL numbers
PL numbers 3 Months 9 Months Q3 FY 22 Q3 FY 21 Q2 FY 22 ₹ crs (31.12.2021) (31.12.2020) Y-o-Y (30-09-2021) 31.12.2021 31.12.2020 Y-o-Y Interest Income 1565.10 1595.51 -1.91 1554.28 4642.88 4814.92 -3.57 Interest Expense 942.45 981.45 -3.97 917.18 2808.34 3090.88 -9.14 Net Interest Income 622.65 614.
Slide 17: PL numbers (detail)
PL numbers 3 Months 9 Months Q3 FY 22 Q3 FY 21 Q2 FY 22 ₹ crs Y-o-Y 31.12.2021 31.12.2020 Y-o-Y (31.12.2021) (31.12.2020) (30-09-2021) Interest Income Interest Income 1565.10 1595.51 -1.91 1554.28 4642.88 4814.92 -3.57 Interest on Advances 1195.32 1271.50 -5.99 1169.77 3526.38 3864.16 -8.97 Interest
Slide 18: Financial strength of the Bank
Financial strength of the Bank Networth (₹ crs) 6,642 6,965 6,611 8000 6000 6,654 4000 6,300 6,331 2000 311 311 311 0 Dec '20 Mar '21 Dec '21 Capital Reserves 17
Slide 19: Business size
Business size Business Turnover (₹ crs) 1,27,013 1,27,349 1,33,918 120000 51,694 55,489 53,187 100000 80000 60000 75,655 78,429 73,826 40000 20000 0 Dec '20 Mar '21 Dec '21 Deposits Advances 18
Slide 20: Deposits
Deposits Deposits (₹ crs) 16% Growth rate (y-o-y) 14% 12% 75,655 78,429 73,826 10% 13.57% 0.03% 0.01% 0.01% 8% 14.80% 4.41% 10.59% 6% 69.90% 68.50% 68.69% 6.23% 4% 5.39% 1.65% 2% 3.46% 30.07% 31.49% 31.30% 0% CASA deposit Retail term deposit Total deposit -0.24% -2% Dec '20 Mar '21 Dec '21 CASA depo
Slide 21: Deposits - NRI Deposits
Deposits NRI Deposits (₹ crs) 5000 7% NRI 4,436 4,418 4500 4,379 deposits 6% 4000 5.58% 3500 6.01% 5.84% 5% 5.58% 3000 4% 2500 3% 2000 1500 2% 1000 Domestic 500 1% deposits 0 0% 94.42% Dec '20 Mar '21 Dec '21 Amount % to total deposits 20
Slide 22: Advances
Advances Advances [Net] (₹ crs) 53,187 55,489 51,694 15.47% 13.22% 18.78% 33.10% 33.79% 32.44% 51.43% 52.98% 48.78% Dec '20 Mar '21 Dec '21 Corporate (> 100 crore) Mid Corporate (> 5 crore & upto 100 crore) Retail (upto 5 crore) 21
Slide 23: Advances to Priority sectors
Advances to Priority sectors Priority Sector Advances (₹ crs) Agriculture Advances* (₹ crs) 60% 53.15% 35000 29,584 30,720 17% 9500 28,617 28,693 30000 9,319 9,317 50% 50.47% 17% 25,094 16.12% 48.93% 25000 9,071 15.90% 40% 46.58% 16% 43.89% 8,931 9000 20000 16% 30% 8,568 15.23% 15000 15% 20% 14.99%
Slide 24: Geographical Credit concentration
Geographical Credit concentration (₹ crs) GBC NPA Restructured SMA-2# State State Balance % to State State % to wise Balance % to Balance % to Balance Outstanding GBC Outstanding wise wise Performing GBC Outstanding GBC Outstanding advances % to % % Performi ng advance Karnataka 25748.11 45.45 1011.
Slide 25: Top Credit Sectors
Top Credit Sectors (₹ crs) Position as on 31.12.2021 NPA SMA 2 # Particulars Balance % to GBC % Total Amount % to sector Amount MSME 15945.03 28.15 1090.70 6.84 464.83 2.92 Agriculture 9317.35 16.45 548.12 5.88 80.10 0.86 Housing Loans 8621.14 15.22 237.91 2.76 163.28 1.89 (Residential Mortgage) NBF
Slide 26: Restructured loans & related accounts
Restructured loans & related accounts 4,690 Stress & NPA position under Restructured loans (₹ crs) Of which, NPA 964 Related a/cs SMA-2 NPA Restructured loans Particulars No of Amount No of Amount Accounts Accounts RF-1 345 137.44 204 78.56 1,739 RF-2 407 118.4 156 38.48 3,726 Others** 169 122.97 25
Slide 27: SMA accounts (SMA 2 and SMA 1)
SMA accounts (SMA 2 and SMA 1) SMA 2 (₹ crs) SMA 1 (₹ crs) 6.00% 5.32% 3000 6.60% 7.00% * 4000 2,785 6.00% 3500 5.00% 2500 4.35% ** 3,453 3000 5.00% 4.00% 2000 2500 4.00% 2.74% 2000 3.00% 1500 2.78% 2.13% 2,181 3.00% 1500 2.00% 1000 2.00% 1000 1,393 1,487 1.00% 1,155 1.00% 500 500 0.00% 0 0.00% 0 De
Slide 28: Income & Profit - Quarterly
Income & Profit - Quarterly Net Income (₹ crs) Operating and Net Profit (₹ crs) 1000 897 448 900 832 819 450 358 384 359 800 283 356 354 700 196 400 600 373 350 300 500 250 146.57 400 300 614 623 200 135.28 200 459 150 100 31.37 100 0 50 Dec '20 Mar '21 Dec '21 0 Dec '20 Mar '21 Dec '21 Net Interest
Slide 29: Return and Capital Adequacy Ratios
Return and Capital Adequacy Ratios Return on Equity (%) (after tax) Return on Assets (%) (after tax) 0.70% 8.51%* 9.00% 8.28% * 0.65% * 0.65% 0.64%* 7.65% 0.60% 0.57% 0.55% 6.00% Dec '20 Mar '21 Dec '21 0.50% *quarterly and not annualised Dec '20 Mar '21 Dec '21 Capital Adequacy (%) - Basel III *qua
Slide 30: Productivity ratios
Productivity ratios Operating Profit per employee (₹ lakh) * Operating Profit per branch (₹ lakh) * 245.75 25.08 222.41 30 22.66 250 194.62 25 19.61 200 20 15 150 10 100 5 50 0 Dec '20 Mar '21 Dec '21 0 * annualized Dec '20 Mar '21 Dec '21 Business per employee (₹ crs) Business per branch (₹ crs) 15
Slide 31: Provisions
Provisions Provisions & Contingencies during the quarter Provision Coverage Ratio Category Provision (in crore) % to total 100% 90% NPA 111.75 53.28% 80.51% 80% Standard advances 34.80 16.59% 70.05% 73.74% 70% Fair Value -7.81 -3.72% 60% Tax 71.25 33.97% 50% Others -0.24 -0.11% 40% Total 209.75 Dec
Slide 32: CD Ratio & Yield on Advances
CD Ratio & Yield on Advances Credit Deposit ratio (%) 73% 72.04% 72% 71% 70.75% 70% 69% 68.33% 68% 67% 66% Yield on Advances & Interest Spread (%) Dec '20 Mar '21 Dec '21 Yield on advances Interest spread 9.38% 9.05% 8.89% 10% 8% 3.98% 3.76% 4.18% 6% 4% 2% 0% Dec '20 Mar '21 Dec '21 31
Slide 33: Asset Quality
Asset Quality Gross NPAs (₹ crs) Net NPAs (₹ crs) 4.91% 6% 3000 3.50% 3.18% 1800 5% 4.11% 2500 3.00% 1600 2.45% 1400 2.50% 4% 3.16% 2000 2,588 1200 1.74% 2,331 1,360 2.00% 1000 3% 1500 1,642 1.50% 800 2% 1000 600 1,707 1.00% 1% 500 400 924 0.50% 200 0% 0 0.00% 0 Dec '20 Mar '21 Dec '21 Dec '20 Mar '
Slide 34: Asset Quality
Asset Quality Composition of NPA Size wise NPA Above Rs 50 Cr Loss 2.98% Assets Sub 3.40% Standard 31.45% Upto Rs 1 Cr Rs 5 Cr to Rs 50 42.20% Cr 30.16% Doubtful 65.15% Rs 1 Cr to Rs 5 Cr 24.67% Credit portfolio wise NPA Mid Corporate (> 5 crore & Corporate (> 100 crore) upto 100 crore) 0% 33% Retai
Slide 35: Asset Quality
Asset Quality NPA accounts of Rs 25 Crore and above and provisions held -Dec’21 (₹ crs) NPA Classification No. of Borrowers Net Balance Provision held Provision % SS - (1) - (101.20) - (35.49) - (35.07%) DS 1 1 (3) 25.13 (127.81) 25.13 (55.79) 100% (43.65%) DS 2 3 (3) 142.12 (125.77) 100.74 (63.85)
Slide 36: Asset Quality
Asset Quality (₹ crs) Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 FY21 Q1FY22 Q2 FY22 Q3 FY22 Opening GNPA 2594.27 2777.46 2456.38 2799.93 2557.64 2188.80 1706.57 2799.93 2588.41 2549.06 2501.13 Addition 637.54 304.07 1998.58 166.84 2.21 1.40 1175.92 1346.37 414.24 445.36 297.67 Fresh slippages 6
Slide 37: External rating wise Advances
External rating wise Advances [ Figures in brackets – as of Dec’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) borrowers (cr) Std. Adv. @ AAA 15 (14) 4,208 (3,061) 7.43
Slide 38: NBFC portfolio
NBFC portfolio [ 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 (12) 4,208 (2,696) 7.43 (4.99) - - -
Slide 39: Top 50 borrowers
Top 50 borrowers [ Figures in brackets – as of Dec‘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 11 (10) 3,988 (2,821) 7.04 (5.22) - - -
Slide 40: Consolidated numbers
Consolidated numbers 3 Months 9 Months Q3 FY 22 Q3 FY 21 Q2 FY 22 Particulars Y-o-Y 31.12.2021 31.12.2020 Y-o-Y (31.12.2021) (31.12.2020) (30-09-2021) Turnover 133918 127014 5.44% 131390 133918 127014 5.44% Asset size 90958 84050 8.22% 89216 90958 84050 8.22% Operating profit 356.17 448.08 -20.51% 4
Slide 41: Investments
Investments AFS Investments [excl. RIDF] (₹ crs) 22.23% HFT 21,635 21,991 0.00% 20,660 25000 20000 15000 HTM 77.77% 10000 5000 Duration 0 Dec '20 Mar '21 Dec '21 AFS HFT HTM TOTAL 4.26 0.00 5.60 5.32 Yield on Investments (%) 7% Liquidity Coverage Ratio 350% 317.92% 300% 278.93% 6.12% 6.02% 245.59% 2
Slide 42: Capital Adequacy
Capital Adequacy (₹ crs) Risk Weighted Assets Particulars 31.12.2020 31.03.2021 31.12.2021 50,863 49,760 52,128 Risk Weighted Assets 50863.16 49,759.61 52128.30 10.65% 10.89% 11.07% Total Capital Fund (Basel III) 7036.02 7,387.05 7375.40 6.35% 6.34% 6.62% Total Tier I Capital 5770.82 6,140.39 6119.0
Slide 43: Share holders’ value
Share holders’ value Share holding pattern Earning Per Share (₹) 14.51 * 15.52 16 12.17 * Others 4.27% 14 Indian Public 12 78.94% 10 8 6 4 2 Banks, FIs, MF, 0 Insurance Cos Dec '20 Mar '21 Dec '21 5.64% * Not annualized Book value (₹ in Cr) 212.66 213.67 223.95 250 Foreign Portfolio 200 Investors 15
Slide 44: Digital capabilities
Digital capabilities Migration to Digital Channel [share of ADC transactions to total CBS transactions] 94% 92.64% 91.63% 91.86% 90.66% 92% 90% 88% 86% 83.50% 84% 82% 80% 78% Mar '20 Mar '21 Jun'21 Sep'21 Dec'21 43
Slide 45: Mobile Banking
Mobile Banking No. of Regd users (Actuals as at the end of the quarter) 19,62,138 16,11,054 13,66,082 12,60,932 11,36,380 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Value of transactions during the quarter No. of transactions during the quarter 106.0 64 66 95.8 58 61 84.0 94.0 55 81.5 6,002 5,748 5,593 9,66
Slide 46: Debit Cards
Debit Cards Position during the quarter Debit cards Penetration 89.40% 88.42% 86.88% 87.21% 51.68 51.55 86.20% 50.34 50.09 49.90 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Total cards issued (Lakhs) Penetration (%) Total ATM transactions by our Debit Card holders Cards Usage 187 163 155 157 125 102 85 76 87
Slide 47: UPI transactions
UPI transactions Position during the quarter BHIM KBL UPI Txns count 1,811 1,610 1,374 1,331 1,225 164850 1,48,148 1,23,647 1,21,076 1,12,709 KBL BHIM UPI Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 No. of Transactions (in 000's) Avg. Transactions per day (in 000's) BHIM KBL UPI Txn Value 339 316 261 263 230
Slide 48: POS & ECOM transactions
POS & ECOM transactions Position during the quarter 70 9.4 66 9.0 9.0 9.0 61 60 61 60 POS Transactions 50 42 6.2 40 5,895 5,607 5,538 5,500 30 810 847 815 845 3,790 20 563 10 0 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 No. of Txn ('000s) Avg per day ('000s) Value of Txn (
Slide 49: Digital Lending
Digital Lending Banking on Digital First Approach…. Digital Adoption Customer Rating 5 point Scale Best TAT In Mins KBL Xpress Home Loans 68% 4.52 7 Digital Leads Enabling reach digitally 2100+ KBL Xpress Car Loans 78% 4.44 15 Risk Reduction KBL Xpress Cash Improving Asset Quality 100% 4.49 8 ( Cibi
Slide 50: 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 49
Slide 51: Sustainability driven by Digital Tools
Sustainability driven by Digital Tools Digital calling tool Collection activities E-Connect Lead calling status Loan Payment tracking Portal 50
Slide 52: Xpress Analytics
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 53: 04 Business Strategy
04 Business Strategy Corporate Goal and Roadmap ahead 52
Slide 54: Corporate Goal for 2021-22
Corporate Goal for 2021-22 Risk Management Dept to be covered under 10 Further ‘QMSS-ISO 9001:2015’ 09 strengthening of Digital sales verticals Transformation- Construction of an KBL NxT journey 08 iconic building ‘KBL 07 Centenary Tower’ Setting up of ACoE 06 (Analytical Centre of Excellence) 05 Im
Slide 55: Roadmap – Upcoming Lanes
Roadmap – Upcoming Lanes 54 • 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 resear
Slide 56: 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 57: Board of Directors
Board of Directors Pradeep Kumar Panja Mahabaleshwara M S Part Time Chairman Managing Director & CEO Mrs Mythily Ramesh Keshav Krishnarao Desai B R Ashok Bengaluru Hubballi Chartered Accountant Businessman IT Professional and Co-Founder & CEO of NextWealth Partner in M/s. MSKC & Associates, Chartere
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