Karur Vysya Bank Ltd. · NSE:KARURVYSYA
Karur Vysya Bank — Q4 FY2021 Earnings Presentation
53 slides from Karur Vysya Bank's earnings presentation, May 29, 2021
Slide 1: Regulation 30 intimation letter to stock exchanges
S mart aoay to bank IRC: F48:52:220:202 1 29.05.2021 The Manager, The Manager, National Stock Exchangeof India Ltd, Bombay Stock Exchange limited, Exchange Plaza, 5th Floor, Phiroze Jeejeebhoy Towers, Plot No. C/ 1, 'G' Block, Dalai Street, sandra- Kurla Complex, Mumbai -- 400001 Bandra (Eastl, Mumb
Slide 2: Investor Presentation 31.03.2021
31.03.2021 Investor Presentation
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Karur Vysya Bank Limited (“the Bank”) solely by the Bank for information purposes only. This presentation is not a complete description of the Bank and the information contained herein is only current as of its date and has not been verified by anyon
Slide 4: Contents
Contents 4 27 40 17 33 Highlights Disciplined Strategy road approach to map reduce the share Driving growth of stressed asset Building a across verticals strong digital ecosystem 3 www.kvb.co.in
Slide 5: Strong presence in India's fast growing hinterland
Strong presence in India’s fast growing hinterland Category 31.03.21 31.03.20 31.03.19 Branches 780 779 778 1 ATM’s + Cash Recyclers 2,236 2,224 2,179 6 1 1 12 6 Category No. of Branches BBU* CBU* Other Offices# 1 6 Metro 201 7 1 9 9 Urban 155 4 15 4 1 14 Semi Urban 297 1 2 5 Rural 127 25 Total 780
Slide 6: Awards
Awards 2020 Innovative Best Practice in Service 2020 Best Digital 2020 Automation of file Excellence Banking Solution of the uploading process - GEFU by CII – Digital year process through RPA Bot by Transformation DX Summit by Kamikaze Payments Uipath Automation Best Practice in Digital & Cards Awar
Slide 7: Quarter in focus
Quarter in focus
Slide 8: Highlights Q4 FY2021
Highlights Q4 FY2021 Operating Net interest profit: ₹249 crore income (NII): Total provisions: ₹613 crore ₹145 crore Fee income: ₹157 Net interest Profit after tax: crore margin (%): 3.46 ₹104 crore 7 www.kvb.co.in
Slide 9: Key Performance Indicators - KPIs
(Rs. crore) Key Performance Indicators - KPIs Particulars Particulars Mar 21 (Q4) Mar 20 (Q4) Growth (YoY) Dec 20 (Q3) Sep 20 (Q2) Jun 20 (Q1) Net interest income 613 591 4 584 601 562 Operating profit 249 500 (50) 257 449 474 Net profit 104 84 24 35 115 106 Advances 52,820 48,516 9 52,113 49,613 48
Slide 10: Key Performance Indicators - KPIs
(Rs. crore) Key Performance Indicators - KPIs Mar 21 (12 Mar 20 (12 Particulars Particulars Growth (YoY) months) months) Net interest income 2,360 2,348 - Operating profit 1,429 1,761 (19) Healthy capitalisation Net profit 359 235 53 and liquidity Levels Advances 52,820 48,516 9 CRAR stood at 18.98%
Slide 11: Profit & Loss Statement
(Rs. crore) Profit & Loss Statement Quarter 12 months Particulars Mar 21 Mar 20 YoY (%) Mar 21 Mar 20 YoY (%) Net Interest Income 613* 591 4 2,360* 2,348 - Other Income 216 347 (38) 1,057 1,155 (8) - Fee income 157 159 (1) 548 658 (17) - Others 59 188 (69) 508 497 2 Total Income 828 938 (12) 3,416 3
Slide 12: Fee & Other Income
(Rs. crore) Fee & Other Income Quarter 12 months Particulars Mar 21 Mar 20 YoY (%) Mar 21 Mar 20 YoY (%) TOTAL NON-INT. INCOME 216 347 (38) 1,057 1,155 (8) - Fee Income 157 159 (1) 548 658 (17) - Investment trading profit 2 137 - 355 340 4 - Forex Income 10 10 - 32 37 (14) - Others* 47 41 15 122 132
Slide 13: Key Ratios
Key Ratios Quarter 12 months Particulars Mar 21 Mar 20 Mar 21 Mar 20 Cost of Deposits (%) 4.63 5.55 4.96 5.76 Yield on Advances (%) 8.52 9.45 8.93 9.63 Yield on Funds (%) 7.42 8.25 7.67 8.48 Cost of Funds (%) 4.65 5.59 4.99 5.80 Net Interest Margin (%) 3.46 3.46 3.40 3.44 Cost to income (%) 69.87 46
Slide 14: Balance Sheet
(Rs. crore) Balance Sheet Particulars Mar 21 Mar 20 YoY (%) Capital & Liabilities Capital 160 160 - Reserves and Surplus 6,800 6,440 6 Deposits 63,278 59,075 7 Borrowings 2,528 1,184 - Other Liabilities and Provisions 1,857 1,419 31 Total 74,623 68,278 9 Assets Cash and Balances with RBI 3,124 2,733
Slide 15: Provisions and Contingencies
(Rs. crore) Provisions and Contingencies Quarter 12 months Provision for Mar 21 Mar 20 Mar 21 Mar 20 NPA 292 354 634 1,356 Standard Assets 1 (4) 6 3 Restructured Advances 11 (2) 72 4 Other credit related item 59 - 59 - Others (incl. NPI) (341) 55 (14) 85 NPI 15 1 19 36 Covid - 19 provision (301) 47
Slide 16: Optimising cost of borrowings
Optimising cost of borrowings Effective allocation of capital sourced at low cost has enabled the bank to deliver decent returns. A resilient digital infrastructure and a rising digital presence has enabled the bank strengthen its profitability. Declining cost of deposits and cost of funds Quarter 1
Slide 17: Capital to Risk Weighted Assets Ratio (CRAR)
(Rs. crore) Capital to Risk Weighted Assets Ratio (CRAR) Particulars Mar 21 Mar 20 Dec 20 Basel III CRAR % 18.98 17.17 18.52 Total capital 7,515 7,202 7,211 Tier I capital 6,711 6,404 6,409 Tier II capital 803 798 802 RWA 39,598 41,948 38,946 Credit risk 32,003 34,127 31,603 Operational risk 6,005 5
Slide 18: Driving growth across verticals
Driving growth across verticals
Slide 19: Business – growing sequentially
(Rs. crore) Business – growing sequentially Parameter Mar 21 Mar 20 YoY % Total Deposits 63,278 59,075 7 Gross Advances 52,820 48,516 9 Advances (ex-IBPC) 52,820 47,716 11 Total Business 1,16,098 1,07,591 8 1,14,202 1,16,098 1,07,591 62,089 63,278 59,075 48,516 52,113 52,820 Mar-20 `Dec 20 Mar-21 To
Slide 20: Growing our books responsibly
(Rs. crore) Growing our books responsibly A strong capital base, high levels of liquidity, and diversified advances provide a solid foundation for an attractive and sustainable return on capital to shareholders. Y-o-Y Particulars Mar 21 Mar 20 Growth % Agriculture 11,531 8,936 29 Retail (Personal Ba
Slide 21: Driving growth across verticals: Agriculture
(Rs. crore) Driving growth across verticals Agriculture Category Amount Percentage Gold Loan portfolio (Bank as a whole) Secured Advances 11,274 97.77% Gold loan 10,703 13000 Others 571 12852 Unsecured Advances 257 2.23% 12069 11149 Total Advances 11,531 9948 9227 Financial Inclusion:- 6500 Financia
Slide 22: GECL portfolio and commercial ticket size
Driving growth across verticals GECL (Guaranteed Emergency Credit Loan) Portfolio Vertical Mar 21 Dec 20 Sep 20 Jun 20 Commercial 1,431 1,454 1,301 791 Agriculture 5 5 3 - Corporate 721 541 212 23 TOTAL 2,157 2,000 1,516 814 Ticket size of Commercial Book 4% 10% • Average ticket size - Rs.37 lakh •
Slide 23: Corporate Loans
(Rs. crore) Corporate Loans Standard Corporate advances > 100 crore 3000 8.0 2000 5.6 5.5 5.0 5.5 5.2 5.1 2540 2733 2554 2887 2927 1000 2.0 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Amount > 100cr % on advance Consortium/MBA Sole Banking NBFC Govt/PSU 13% 6% (5%) 19% 15% (21%) (14%) Consortium 32% MBA • Co
Slide 24: Sectoral composition
Sectoral composition Rs.52,820 crore Breakup of Industrial exposure (Rs. 13,999 crore) GEMS & JEWELLERY OTHERS OTHER 5% 7% EXPOSURES TRANSPORT SECTOR INFRASTRUCTURE NBFC 13% 2% 14% 3% CONSTRUCTION BILLS MANUFACTURING 4% Agri 2% SECTOR CEMENT 2% 27% 2% CRE ALL ENGINEERING 6% 5% WOOD AND ITS PRODUCTS
Slide 25: Retail portfolio distribution
(Rs. crore) Driving growth across verticals Retail portfolio distribution Particulars March 2021 March 2020 March 2019 March 2018 March 2017 Housing loans 5,005 4,548 3,619 2,795 2,330 Housing loans as a % overall loan book 9 9 7 6 6 Jewel loans 1,762 895 625 578 596 Jewel loans as a % overall loan
Slide 26: Retail Liability Franchise: Granular & Sticky
Retail Liability Franchise : Granular & Sticky 24% • Term deposits are primarily retail deposits • 94% of term deposits 10% 66% are < Rs.5 Cr Term Deposits Demand Deposits Low dependence on wholesale deposits Saving Deposits 3% 6% Low concentration of Deposits 7% 6% 6% 6% 6% 28% 64% < Rs. 15 Lakhs R
Slide 27: Investment Portfolio
Investment Portfolio Investments (Rs. crore) Investment Category 16073 16465 19.20% HTM Mar 20 Mar 21 80.80% AFS Investment Composition Duration 0.86% 8.37% SLR AFS HFT HTM Total 1.75 - 3.83 3.48 Debenture/CD/MF/CP Shares Yield on Investments 90.77% 6.63% 5.30% Debentures/CD/MF/CP includes SRs of Rs
Slide 28: Disciplined approach to reduce the share of stressed assets
Disciplined approach to reduce the share of stressed assets
Slide 29: Movement of NPA
(Rs. crore) Movement of NPA Particulars Apr 20 - Mar 21 Apr 19 – Mar 20 Gross NPAs Opening Balance 4,213 4,450 Additions during the period 959 1,602 Reductions during the period 1,029 1,839 Closing Balance 4,143 4,213 Net NPAs Opening Balance 1,809 2,420 Additions during the period 140 86 Reductions
Slide 30: NPAs & Provisions
(Rs. crore) NPAs & Provisions Gross NPA Net NPA NPA Provision 8.79 8.68 7.85 4450 4213 4143 6.56 3016 4.98 4.46 2420 2351 2366 3.58 3.92 1961 3.41 1863 1809 1719 1484 2.53 1033 1091 429 Mar-17 Mar-18 Mar-19 Mar 20 Mar-21 Net NPA% Gross NPA% Mar-17 Mar-18 Mar-19 Mar 20 Mar-21 68.90 72.70 1 4.00% 2.91
Slide 31: Movement of Standard Restructured Advances
(Rs. crore) Movement of Standard Restructured Advances Apr 20 to Mar 21 Apr 19 to Mar 20 Particulars A/c’s Amt. A/c’s Amt. A. Position at the beginning of the period 73 193.29 34 72.09 B. Addition during the period * 1,576 797.61 53 171.58 C. Additions in existing A/c’s - 27.16 - 1.72 D. Addition th
Slide 32: Standard Restructured Credit – Additions
(Rs. crore) Standard Restructured Credit – Additions Amount as on Amount as on Amount as on Amount as on Vertical 31.03.21 31.12.20 30.09.20 31.03.20 Commercial 38 11 - - Corporate 202 69 - - Retail 313 293 - - Sub-total (COVID Package) 553 373 - - MSME Restructuring 245 113 11 172 TOTAL 798 486 11
Slide 33: Sector-wise Standard Restructured Advances
(Rs. crore) Sector-wise Standard Restructured Advances S. Amount Stressed Book Analysis SECTOR N. Mar 21 Mar 20 3500 5.00 1 Housing Loan 168.98 - 3039 2 Textile 73.00 66.72 2548 2325 2090 2376 3000 4.07 3 Basic Metal & its products 71.47 - 4 Ceramic 67.66 - 3.73 363 5 Cement & Cement Products 54.26
Slide 34: Building a strong digital ecosystem
Building a strong digital ecosystem
Slide 35: Building a strong digital ecosystem: DLite
Building a strong digital ecosystem DLite – KVB’s digital banking platform 9% 25 lakh Growth in digital DLite application transactions in Q4 FY21 downloads over Q3FY21 2.31+ lakh 14.6+ lakh 89% Digital accounts Registered users of Share of digital opened Dlite transaction DLite – Digitally enabled u
Slide 36: Building a strong digital ecosystem
Building a strong digital ecosystem Technology is ubiquitous and our digital strategy similarly spans our entire organisation, improving the experience, process efficiency, simplicity and reach of our products and services. We continuously invest in our technology and infrastructure capabilities to
Slide 37: Building a strong digital ecosystem
Building a strong digital ecosystem At KVB, we are investing in different technologies to enhances customer experience and the reach of our products. API – we are focusing on building a secured API gateway that enables our customers to carry out transactions securely with the bank or with any other
Slide 38: Visible growth in digital transaction
Visible growth in digital transaction Mobile transactions volume FASTag sold 243 222 1.91 1.89 146 0.12 0.36 FY 18-19 FY 19-20 FY 20-21 FY 17-18 FY 18-19 FY 19-20 FY 20-21 Mobile Banking (Nos in lakh) Nos. in lakh Digital vs Branch Transaction (%) Digital Mode (All channels) 83 89 Branch Channel (cu
Slide 39: Establishment of Expenses Management Cell
Establishment of Expenses Management Cell Spend Analytics Vendor and Demand Consolidation , Aggregation Governance and Management Enhanced Control Corporate over Internal Budgeting Operations EMC Centralized Asset Cost Center and Profit Management and Center Accounting Depreciation Accounting Centra
Slide 40: Transformation of branch operations to Centralized Operations Center
Transformation of branch operations to Centralized Operations Center 4.5 lakh Retail Over 1 crore Accounts clearing cheques Opened processed 35000 Current Over 7 lakh Accounts Opened Customer Service Requests handled COC 6000 Retail 5.5 lakh Bulk Funds Loans Transfer using Robotic Processed Process
Slide 41: Strategic roadmap for growing responsibly
Strategic roadmap for growing responsibly
Slide 42: KVB's pillars of strength
KVB’s pillars of strength Wide offerings basket Putting customer first - Becoming more digital – Growing presence in the across different segments Putting our customers at Because that’s increasingly underpenetrated markets – With an aim to emerge the centre of every how our customers and - The bank
Slide 43: Our strategy for growth
Our strategy for growth Goal: To achieve a RoA of 1% plus by FYE 31st March, 2024 Strategy: Deliver sustainable and consistent financial performance by providing superior services to our targeted customers Strategy Summary To offer our clients appropriate financial solutions/products/services, by fo
Slide 44: SMAR-T Growth Strategy
Growth Strategy SMAR - T GROWTH SME’s, eMerging Corporates, Agriculture, Retail through Technology 43 www.kvb.co.in
Slide 45: Five Pillars of Growth
Five Pillars of Growth PEOPLE PROCESSES PRACTICES PLANNING PARTNERSHIPS HR Talent Physical Best Practices Optimization of Co-lending. Co- Training Phygital Compliance resources sourcing. Fintechs Digital Regulatory norms STABILITY SUCCESS SIGNIFICANCE 44 www.kvb.co.in
Slide 46: People - First Pillar of Growth
People - First Pillar of Growth • Nurturing in-house talent • Continuous capacity building of officers in credit appraisal, risk management, loan recovery PEOPLE • Digital enablers to sales force at field level HR Talent Training • Talent acquisition through lateral hires • Talent management through
Slide 47: Processes - Second Pillar of Growth
Processes - Second Pillar of Growth • Digital adoption A2Z customer journey through technology to deliver seamless personalized customer centric experience • Improved decision making and operational excellence by PROCESSES leveraging data, business intelligence & advanced analytics Physical Phygital
Slide 48: Practices - Third Pillar of Growth
• Strong governance and oversight • Developing a good compliance culture PRACTICES • Zero tolerance for non- adherence to process and compliance Best Practices Compliance • Comprehensive risk management practices Regulatory norms STABILITY SUCCESS SIGNIFICANCE 47 www.kvb.co.in
Slide 49: Planning - Fourth Pillar of Growth
Planning - Fourth Pillar of Growth • Optimize the use of financial resources • Improved efficiency of capital deployment PLANNING • Ensuring adequate competitive funding is available Optimization of resources STABILITY SUCCESS SIGNIFICANCE 48 www.kvb.co.in
Slide 50: Partnerships - Fifth Pillar of Growth
Partnerships - Fifth Pillar of Growth • Co-lending partnerships with NBFCs PARTNERSHIPS • Fintech partnerships for sourcing and to provide digital Co-lending Co- customer experience across multiple channels sourcing Fintechs STABILITY SUCCESS SIGNIFICANCE 49 www.kvb.co.in
Slide 51: Engaging workforce
Engaging workforce Young Workforce Number of Employees Lower Attrition 7956 7935 3.9 35 3.8 7746 7663 2.7 34 34 2.2 7400 1.5 33 33 FY 17 FY 18 FY 19 FY 20 FY 21 FY 17 FY 18 FY 19 FY 20 FY 21 FY 17 FY 18 FY 19 FY 20 FY 21 Leading to Improved Productivity 15.04 8.2 149 14.42 142 13.56 138 4.4 4.6 134
Slide 52: Sustained Decade of Growth
(Rs. crore) Sustained Decade of Growth Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Paid up Capital 107 107 107 122 122 122 145 160 160 160 Reserves 2,601 2,978 3,219 4,124 4,451 4,723 6,066 6,205 6,440 6800^ Owned funds 2,708 3,085 3,326 4,246 4,573 4,845 6,2
Slide 53: Thank You
Thank You