Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q4 FY24 Earnings Presentation
37 slides from Karnataka Bank's earnings presentation, May 24, 2024
Slide 1: Exchange submission letter for analyst presentation
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 : L85110KA1924PLC001128 SECRETARIAL DEPARTMENT 24.05.2024 HO: SEC:41:20
Slide 2: Investor Presentation Q4 FY24
INVESTOR PRESENTATION Q4 FY24 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 Accelerating our Transformation 02 Journey 03 Our Strengths and Strategies 04 Financial Highlights
Slide 4: 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; ED, Yes Bank
Slide 5: 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 Director Independent Director Independent Director Former Judge, High Court of Senior Partner, M/s. K G Acharya
Slide 6: Banking with a Legacy, Embracing the Future
Banking with a Legacy, Embracing the Future Strategy laid down by the New Management for the Transformational Journey Foster cultural shift to business and sales orientation Benchmark product development with market Digitization & automation at all 100 years of Trust & Excellence levels En
Slide 7: Accelerating our Transformation Journey
Accelerating our Transformation Journey Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 8: Key Achievements During FY24
Key Achievements During FY24 Beginning of transformative steps leading to improved financial position… Deposits and Advances Growth NII and NIM Stakeholder Value GNPA and NNPA Gross Advances INR cr. Within guidance 24.9% 37.9% 24.4% 3.70% 3.51% 15.42% 3.74% 37.8% Growth: 13.71% 3.53% FY23 19.1% FY24
Slide 9: Targeted Performance Improvement to Boost Returns
Targeted Performance Improvement to Boost Returns Cost to Income %: 49.0% - 52.0% Manage Operating Expenses NNPA: 1.0% - 1.5% Enhance Asset Quality ROA %: CASA %: 1.2% - 1.4% 31.0% - 33.0% Effective Capital Allocation Stable Source of Funding NIM %: 3.5% - 3.7% Consistent Interest Margins Cost of Fu
Slide 10: Products
Products Building a Comprehensive Portfolio of Products Customer-centric approach for creating products Leverage Cross-sell & Up-sell opportunities 18 Products launched during FY24 Comprehensive product suite Pipeline of products for continuous growth Retail Agriculture MSME Government Gold Loan Bul
Slide 11: Partnerships
Partnerships Major Partnerships during the Year Integrated marketplace & Wealth Distribution Asset Origination Tie-ups Management HDFC Life Finwizard Technologies Offer comprehensive financial solutions Offer 3-in-1 account which includes Access to industry-leading life savings, demat and trad
Slide 12: Digital and Technology: 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 13: Digital and Technology: 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 14: Digital and Technology: Best in class Analytics Factory
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 Customer Relationship Economically weaker Management (CRM) Section (EWS) CASA Balance Buildup Dashboard
Slide 15: Key Milestones in Q4FY24
Key Milestones in Q4FY24 Celebrating 100 years of Trust & Rebranding Campaign Completed Target Capital Raise Excellence “Bharat Ka Karnataka Bank” INR 600 cr. Inaugurated centenary building with museums showcasing 100-year INR 900 INR 1,500 cr. INR 700 cr. journey and the futuristic cr. completed in
Slide 16: Our Strengths and Strategies
Our Strengths and Strategies Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 17: 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 18: 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 1 in 351 Outbound Sales Culture Indians Bank with Startup-like Agility 100 Year Legacy Happy customers us 37.7%2 46.5% Capitalise on c
Slide 19: 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 20: Key Capabilities in Place for 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 21: 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 2 925 1,504 1 Branches ATM and Recyclers 3 16 7 20 5 Presence Across All Tiers 8 57 Top 5 States Rural 27 Karnataka 588 23.4% Metro 27.8% Maharashtra 57 7 44 588 Total
Slide 22: Rebuild Outward-Facing, Business-Centric Teams
Creating a Performance Driven Culture B. Rebuild Outward-Facing, Business-Centric Teams New Management Redefining KRAs with introduction of ‘3Ps’ - Pay for Person, Position, and Performance Customer- centric Model Outbound, business-oriented sales force Cross- Functional Capabilities Branch ability
Slide 23: Rebuild Outward-Facing, Business-Centric Teams
Creating a Performance Driven Culture B. Rebuild Outward-Facing, Business-Centric Teams Outbound sales team and “Feet on the Street” for growing Inducted 218 Sales Officers and 298 Feet on Ground for liabilities and expanding the home loan book covering key markets and target segments Better control
Slide 24: Foundation in place to Drive Next Leg of Digital Innovation
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 25: Initiatives towards Digitisation
Digitalisation Propelling Robust Book Growth C. Initiatives towards Digitisation Planned future initiatives for 2025 Bank-wide Liability Platform for Seamless Pre-approved and Hyperlocal SEO and National Back Office Onboarding across Flow-Based Loans Martec Platform Transformation journeys Core Syst
Slide 26: Financial Highlights
Financial Highlights Banking with Legacy, Celebrating 100 years of trust Embracing the Future
Slide 27: Karnataka Bank at a Glance
Financial Highlights Karnataka Bank at a Glance Particulars FY24 FY23 Growth Y-o-Y Total Assets 116,085 99,058 17.2% Gross Advances / % Retail 73,002 / 46.60% 61,303 / 50.31% 19.1% / (371 bps) Deposits 98,058 87,368 12.2% Retail Deposits 66,665 58,561 13.8% CASA Ratio 31.97% 32.97% (100 bps) Gross N
Slide 28: Karnataka Bank at a Glance (Quarterly Results)
Financial Highlights Karnataka Bank at a Glance (Quarterly Results) Particulars Q4FY24 Q3FY24 Growth Q-o-Q Q4FY23 Growth Y-o-Y Total Assets 116,085 109,990 5.5% 99,058 17.2% Gross Advances / % Retail 73,002 / 46.60% 69,741 / 47.50% 4.7% / (90 bps) 61,303 / 50.31% 19.1% / (371 bps) Deposits 98,058 92
Slide 29: Liability Profile
Liability Profile Deposit Profile (in INR Cr) Retail Term Deposit Breakup (Mar-24) 98,058 Above 5 cr 87,368 2 cr to 5 cr 8.0% 80,387 75,655 4.1% 71,785 68% 67% 69% 67% 71% 32% 33% 33% 32% 29% FY20 FY21 FY22 FY23 FY24 Below 2 cr Wholesale CASA Term deposit 87.9% Cost of Deposit Cost of Funds 6.0% 6.1
Slide 30: Advances
Advances Gross Advances Profile (in INR Cr) 73,002 61,303 58,043 57,769 27% 52,725 21% 20% 26% 13% 26% 30% 28% 30% 25% 49% 57% 51% 50% 47% FY20 FY21 FY22 FY23 FY24 Retail Mid corporate Large corporate Sectoral Loan Exposure (Mar-24) Yield on Advances MSME 9.9% NBFC, SME, Large & Mid 24.7% 9.5% 9.4%
Slide 31: Asset Quality
Asset Quality GNPA & NNPA Provision Coverage (Incl. & excl. TWO) 80.9% 79.2% 4.82% 4.91% 73.5% 70.0% 64.7% 3.90% 3.74% 55.5% 56.2% 3.53% 3.08% 3.19% 2.42% 36.6% 38.8% 1.70% 1.58% 37.3% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Gross NPA % Net NPA % excl. TWO incl. TWO GNPA Breakup (Mar-24) S
Slide 32: Asset Quality: Restructured Portfolio
Asset Quality Restructured Portfolio GNPA & Restructured Assets (INR cr.) Standard Restructured Portfolio – Break-up 5.5% 7.7% 11.0% 5.7% 7.9% Personal Loans 6,366 5.7% Others 16.4% 3.1% 2,251 4,864 4,078 4,157 3,214 2,293 2,588 2,578 2,800 4,115 MSME 2,571 28.0% Agriculture 1,490 1,579 414 2.0% FY2
Slide 33: Profitability
Profitability Operating Revenue (INR Cr.) Other Income¹ (INR Cr.) 4,618 1,399 1,319 1,300 4,178 993 305 326 954 3,678 378 300 3,292 3,445 124 545 322 414 283 277 96 246 172 561 613 412 356 416 (30) (151) FY20 FY21 FY22 FY23 FY24 Fee income Recovery of written off accounts Treasury income Other incom
Slide 34: Profitability
Profitability Net Interest Margin Cost to Income ratio # 3.7% 52.6% 53.2% 3.5% 3.2% 49.7% 2.8% 2.9% 45.7% 47.1% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Return on Equity Return on Assets 15.4% 13.7% 1.2% 1.2% 7.4% 7.7% 7.4% 0.5% 0.6% 0.6% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 33
Slide 35: Key Ratios
Key Ratios CRAR RWA/Total Assets 63.3% 58.1% 56.6% 53.9% 53.9% 17.5% 18.0% 14.9% 15.7% 12.7% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 LCR Credit Cost % 2.3% 2.4% 308.4% 311.6% 268.6% 246.6% 1.5% 212.3% 1.0% 0.8% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 34
Slide 36: Shareholder Value
Shareholder Value Shareholding Pattern (Mar-24) EPS & Market Capitalisation Foreign 45.0 Institutions 18.9% 10,000 39.8 40.0 37.9 35.0 7,897 8,000 30.0 6,000 25.0 Indian Public 52.7% 20.0 Domestic Institutions 4,000 15.5 4,238 15.0 23.1% 13.9 1,899 9.8 10.0 2,000 Body Corporate 1,307 3.4% 1,725 5.0
Slide 37: 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