Karnataka Bank Ltd. · NSE:KTKBANK
Karnataka Bank — The Karnataka Bank — Q1 FY2023 Earnings Presentation
58 slides from Karnataka Bank's earnings presentation, Jul 23, 2022
Slide 1: Cover letter to stock 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 : L8511 OKA 1924PLC001128 SECRETARIAL DEPARTMENT July 23, 2022 HO /S
Slide 2: Analysis of Financial Results June 2022
• Karnataka Bank Ltd. Your Famil Bank. Across India. 99th Year Analysis of Financial Results June 2022 Marching towards Centenary year (2023-24)
Slide 3: Table of contents
Table of contents 1 01 Highlights Q1 FY23 Financial headline numbers and Key ratios 02 Company Overview Evolution, Presence and Timeline 03 Financial Performance Q1 FY23 Financial Results, Business numbers, Productivity ratios , Asset Quality 04 Digital Presence Digital & Risk Management systems, Di
Slide 4: Highlights Q1 FY23
Table of contents 1 01 Highlights Q1 FY23 Financial headline numbers and Key ratios 02 Company Overview Evolution, Presence and Timeline 03 Financial Performance Q1 FY23 Financial Results, Business numbers, Productivity ratios , Asset Quality 04 Digital Presence Digital & Risk Management systems, Di
Slide 5: Major Highlights Q1 FY23
Major Highlights Q1 FY23 Operating Profit Deposit Growth Loan Growth Asset Quality • 2.18% YoY growth in operating • CASA deposits increased by 12.51% • Advances grew by 13.03% YoY • Provision Coverage Ratio profit to Rs. 412.78 crore YoY • CASA proportion at 32.80%, up by increased further to 76.77
Slide 6: Highlights Q1 FY23
Highlights Q1 FY23 ₹ in Cr Deposits Highlights Q4 FY22 Advances 30.06.2022 30.06.2021 30.06.2022 30.06.2021 80577 76215 5.72 % 13.03 % 58359 51631 Growth Growt Investments Balance Sheet Size 30.06.2022 30.06.2021 -0.45 % 9.22 % 30.06.2022 30.06.2021 23195 23301 94541 86561 Net Profit (Qtr) 7.63 % 2.
Slide 7: Highlights Q1 FY23 key ratios
Highlights Highlights Q1 FY23 ₹ crs Key Ratios as on / for the quarter 30.06.2022 (in brackets-30.06.2021 / Sequential 31.03.2022) NIM NI CRAR 3.33 % ( 2.98%) 15.41 % (14.58%) if Gross Net NPA NPA 4.03% 2.16% (4.84%) ( 3.02%) ROE ROE ROA 6.39 % if 0.49 % ¢=> (0.49%) Gross Net (6.34%) NPA NPA Sequent
Slide 8: Headline numbers
Headline numbers 3 Months 12 Months Q-o-Q Y-o-Y ₹ in Cr Particulars Q1 FY 23 Q4 FY 22 variation Q1 FY 22 variation FY 22 Turnover 138936 137170 1.29% 127846 8.67% 137170 Asset size 94541 92041 2.72% 86561 9.22% 92041 Operating profit 412.78 380.12 8.59% 403.96 2.18% 1634.00 Operating Profit (excl Tr
Slide 9: Company Overview
Table of contents 1 01 Highlights Q1 FY23 Financial headline numbers and Key ratios 02 Company Overview Evolution, Presence and Timeline 03 Financial Performance Q1 FY23 Financial Results, Business numbers, Productivity ratios , Asset Quality 04 Digital Presence Digital & Risk Management systems, Di
Slide 10: Company Overview
Company Overview Incorporated in the year 1924 879 branches 12 million + 879 ATMs 38 E-lobbies Happy customers 572 Cash recyclers 517 mini E-lobbies Business Turnover of Rs ₹ 1,38,936 crore as on June 2022 Our MISSION is to be a technology Our VISION is to be savvy, customer centric progressive prog
Slide 11: Pan India Footprint
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% 52 25 17 25 7 41 Branches liil ATMs & Recyclers 558 1 1459 1448 1451 1600 50 21 1400 877 879 1200 858 1000 800 Presence in South India w
Slide 12: Timeline (First 50 years)
Timeline (First 50 years) 1924 Incorporation > 1949 > 1960-66 Takeover > 1972 Own Head Office building > 1974 Golden Jubilee Year Silver Jubilee Year Incorporated on Turnover: Rs 94.98 lakhs Sringeri Sharada Bank Bank's own the 18th of Deposits :Rs 55.59 lakhs in 1960 multistoried Head Turnover:
Slide 13: Timeline (Next 48 years)
Timeline (Next 48 years) Marching towards Centenary Year 2023-24 1984 1991-99 2000-17 2017-20 2020-22 Diamond Jubilee Year > Growth Business Turnover crossed > Technology adoption & branding > Transformation > KBL –NxT Turnover: Rs 333.56 Cr Core Banking system Finacle Transformation Project
Slide 14: Financial Performance Q1 FY23
Table of contents 1 01 Highlights Q1 FY23 Financial headline numbers and Key ratios 02 Company Overview Evolution, Presence and Timeline 03 Financial Performance Q1 FY23 Financial Results, Business numbers, Productivity ratios , Asset Quality 04 Digital Presence Digital & Risk Management systems, Di
Slide 15: PL Numbers
PL Numbers ₹ in Cr 3 Months 12 Months Q-o-Q Y-o-Y Particulars Q1 FY 23 Q4 FY 22 variation Q1 FY 22 variation FY 22 Interest Income Interest Expense 1629.08 941.52 1578.78 922.29 3.19% 2.09% _t 1523.50 _t 948.71 6.93% -0.76% •• 6221.66 3730.63 Net Interest Income Non-Interest Income 687.56 132.79 656
Slide 16: PL Numbers (interest income and expense)
PL Numbers ₹ in Cr 3 Months 12 Months Q-o-Q Y-o-Y Particulars Q1 FY 23 Q4 FY 22 Q1 FY 22 FY 22 variation variation Interest Income Interest Income 1629.08 1578.78 3.19% ♦ 1523.50 6.93% ♦ 6221.66 Interest on Advances 1246.74 1211.50 2.91% ♦ 1161.29 7.36% ♦ 4737.88 Interest on Investments 343.03 330.0
Slide 17: Financial Strength of the Bank
Financial Strength of the Bank Networth (₹ crs) 7,095 7,209 6,748 Business Turnover (₹ crs) 8000 127,846 138,936 6000 137,170 6,784 6,898 4000 6,437 120000 51,631 56,783 58,359 100000 2000 311 311 311 80000 0 June '21 Mar '22 June' 22 60000 80,387 80,577 76,215 ■ Capital ■ Reserves 40000 20000 0 Jun
Slide 18: Deposits
Deposits 16% Deposits (₹ crs) Growth rate (y-o-y) 14% 76,215 80,387 80,577 12% 10% 14.06% 12.52% 8% 69.17% 67.03% 67.20% 11.23% 2.89% 6% 2.71% 3.98% 6.25% 6.07% 5.72% 4% 30.82% 32.97% 32.80% 2% Jun '21 Mar '22 Jun'22 0% CASA deposit Retail term deposit Total deposit ■ CASA deposits ■ Retail term dep
Slide 19: Advances
Advances Advances [Net] (₹ crs) Growth Y-O-Y (%) 51,631 56,783 58,359 68.77% 65.05% 14.30% 20.37% 20.87% 55.00% 33.48% 31.85% 32.81% 35.00% 15.00% 9.57% 10.83% 4.55% 4.49% 3.26% 5.72% 52.22% 47.78% 46.32% 0.31% -5.00% Jun '21 -1.19% Mar '22 Jun'22 -4.46% Jun '21 Mar '22 Jun'22 -25.00% Corporate (> 1
Slide 20: Advances
Advances Credit Deposit ratio (%) 73% 72.43% Sectoral Loan exposures 72% 70.64% 71% 70% Others Agriculture 10.68% 12.57% 69% 68% 67.74% NBFC 14.81% MSME 67% 27.05% 66% Infra 2.09% 65% Jun '21 Mar '22 Jun'22 Other Personal loans 6.81% Yield on Advances & Interest Spread (%) Iii Yield on advances llil
Slide 21: Advances to Priority Sectors
Advances to Priority Sectors - - - - Priority Sector Advances (₹ crs) Agriculture Advances* (₹ crs) Amount % Amount % 58% 32,077 33000 21% 11000 31,502 19% 10,473 56% 32000 10500 56.41% 17% 54% 55.18% 18.42% 31000 9,849 10000 15% 52% 15.23% 17.25% 30000 13% 9500 50% 8,931 28,693 11% 29000 9000 48% 4
Slide 22: Geographical Credit concentration
Geographical Credit concentration (₹ crs) (₹ crs) GBC NPA Restructured SMA-2# State State State Balance % to Balance % to State Balance % to Balance % to wise Outstanding GBC wise Performing Outstanding GBC wise Outstanding GBC Outstanding advances % to % % Perf advance Karnataka 26548.46 44.55 997.
Slide 23: Restructured Loans
Restructured Loans Restructured Portfolio –Details Standard Restructured Portfolio –Movement (₹ crs) Q1 FY 23 Particulars Q1 FY 23 Particulars FY 22 Standard NPA Total Opening balance 4115.18 Restructured Amount 3652.64 649.04 4301.68 4478.27 Fresh restructuring during the period 26.99 Provision mad
Slide 24: SMA Accounts (SMA 2 and SMA 1)
SMA Accounts (SMA 2 and SMA 1) SMA 2 (₹ crs) SMA 1 (₹ crs) 4.00% 2000 1800 2.50% 1200 3.50% 3.41% 2.19% 1600 3.00% * 1400 2.00% 1.78% 1000 2.50% 2.34% 1200 1.46% ** 800 1.50% 2.00% 1000 1.62% 1,105 1.75% 968 600 1.64% 800 1.50% 1.00% 600 1.05% 400 899 777 1.00% 0.89% 400 0.50% 603 0.50% 200 200 0.00
Slide 25: Asset Quality
Asset Quality Gross NPAs (₹ crs) Net NPAs (₹ crs) 6% 4.84% 3000 3.50% 3.02% 1800 3.00% 2.42% 1600 5% 3.90% 4.03% 2500 1400 2.50% 2.16% 4% 2000 1200 2.00% 1000 1,377 2,401 1,263 2,251 1,557 2,549 3% 1500 1.50% 800 2% 1000 600 1.00% 400 1% 500 0.50% 200 0% 0 0.00% 0 - - - - Jun '21 Mar '22 Jun'22 Jun
Slide 26: NPA Break-up
NPA Break-up Composition of NPA Size wise NPA Sub Above Rs 50 Cr Loss Assets 15.72% Standard 16.89% 25.24% Upto Rs 1 Cr 37.41% Rs 5 Cr to Rs 50 Cr 23.18% Doubtful 57.88% Credit portfolio wise NPA \ Rs 1 Cr to Rs 5 Cr 23.69% Corporate (> 100 crore) 13% & upto 100 crore) 26% J Mid Corporate (> 5 crore
Slide 27: NPA Analysis
NPA Analysis Movement in NPA during Q1 FY 23 (₹ crs) Particulars Amount NPA Sectoral exposures Opening GNPA 2250.82 Vehicle Loans Others Additions 569.37* Personal Loans 1% 4% 4% Sub Total ( A ) 2820.19 Large Enterprise 18% Reduction Up-gradation 150.59 Housing Recoveries (excluding upgraded accts)
Slide 28: NPA Break-up Asset Quality
NPA Break-up Asset Quality NPA accounts of Rs 25 Crore and above and provisions held (₹ crs) NPA Classification No. of Borrowers Net Balance Provision held Provision % SS - - - - DS 1 - (4) - (150.38) - (122.87) - (81.71) DS 2 1 (2) 69.42 (97.73) 28.16 (56.14) 40.56 (57.44) DS 3 - - - - LOSS 1 (-) 3
Slide 29: Income & Profit (quarterly)
Income & Profit (quarterly) Net Income (₹ crs) Operating and Net Profit (₹ crs) 913 □ 1000 800 900 800 257 □ 820 600 569 133 423 413 700 226 500 404 389 380 600 400 500 400 300 656 688 114 300 575 130 200 200 106 100 100 0 - Jun '21 Net Interest Income Total Income (net of int exp) - Mar '22 Other I
Slide 30: Return and Capital adequacy ratios
Return and Capital adequacy ratios Return on Equity (%) (after tax) Return on Assets (%) (after tax) 9.00% 1.00% 7.41% 0.90% 6.00% - 6.34% 6.39% 0.80% 0.70% 0.60% 0.50% 0.49% 0.56% 0.49% 0.40% 3.00% 0.30% Jun '21 Mar '22 Jun'22 Jun '21 Mar '22 Jun'22 Capital Adequacy (%) - Basel III 18.00 16.00 14.5
Slide 31: Capital Adequacy
Capital Adequacy (₹ crs) Risk Weighted Assets Particulars 30.06.2021 31.03.2022 30.06.2022 51,855 52,808 51,062 Risk Weighted Assets 51,061.91 51,855.44 52,807.73 11.30% 11.12% 11.32% Total Capital Fund (Basel III) 7,445.76 8118.55 8,137.49 6.89% 5.51% 5.42% Total Tier I Capital 6,178.00 6,558.19 6,
Slide 32: Provisions
Provisions Provision Coverage Ratio Category Provision Provision 100.00% during during Q1 FY 23 Q1 FY 22 90.00% NPA 404.10 230.50 80.00% 73.47% 76.77% 72.16% Standard advances -29.18 105.17 70.00% Fair Value -11.37 21.18 60.00% Tax -64.30 -59.95 50.00% Others -0.65 0.98 40.00% Total 298.60 297.88 Ju
Slide 33: Provisions
Provisions Sector-wise PCR % 100.00% 100.00% 98.59% 98.92% 100.00% 98.59% 98.14% 96.46% 94.09% 89.64% 80.00% 81.69% 62.18% 60.00% 40.00% 30.19% 20.00% 0.00% NBFC 0.00% Large Infra CRE Agri MSME Housing Housing I LRD Personal Vehicle Staff Housing Others Total --PCR %(incl TW) PCR % (excl TW) Secured
Slide 34: Productivity Ratios
Productivity Ratios Operating Profit per employee (₹ lakh) * Operating Profit per branch (₹ lakh) * 19.44 19.18 19.44 188.32 186.32 187.84 20 200 15 150 10 100 5 50 0 Jun '21 Mar '22 Jun'22 0 * annualized Jun '21 Mar '22 Jun'22 Business per employee (₹ crs) Business per branch (₹ crs) 16.10 16.51 20
Slide 35: Investments
Investments Investments [excl. RIDF] (₹ crs) AFS 26.08% 23,301 23,195 22,041 25000 HFT 20000 0.04% 15000 HTM 73.88% 10000 5000 Duration 0 Jun '21 Mar '22 Jun'22 AFS HFT HTM TOTAL 3.19 0.00 5.31 4.78 Yield on Investments (%) 6% 5.95% Liquidity Coverage Ratio 400% 5.47% 311.35% 300% 272.78% 272.00% 20
Slide 36: Borrowers under External Rating
Borrowers under External Rating [ Figures in brackets – as of June’21] 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 18 (12) 5181 (3031) 8.6
Slide 37: External Rating of Top 50 borrowers
External Rating of 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 13 (8) 4691 (2886) 7
Slide 38: External Rating of NBFC Portfolio
External Rating of NBFC Portfolio [ Figures in brackets – as of June ‘21] 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 16 (10) 4481 (2531)
Slide 39: Shareholders value
Shareholders value Earning Per Share (₹) Share holding pattern 16.36 Indian Public 17 78.32% 12673879 14.68 16 0.00% 15 13.64 14 13 Banks, FIs, MF, 12 Insurance Cos Jun '21 Mar '22 Jun'22 5.57% Book value (₹ in Cr) 217.08 228.01 231.64 250 200 Foreign Portfolio 150 Investors 100 16.11% 50 0 Jun '21
Slide 40: Consolidated Numbers
Consolidated Numbers 3 Months 12 Months Q-o-Q Y-o-Y Particulars Q1 FY 23 Q4 FY 22 Q1 FY 22 FY 22 variation variation Turnover (₹ in Cr) 138936 137170 1.29% 127846 8.67% 137170 Asset size (₹ in Cr) 94539 92040 2.72% 86561 9.22% 92040 Operating profit (₹ in Cr) 412.65 379.97 8.60% 403.78 2.19% 1633.37
Slide 41: Digital Presence
Table of contents 1 01 Highlights Q1 FY23 Financial headline numbers and Key ratios 02 Company Overview Evolution, Presence and Timeline 03 Financial Performance Q1 FY23 Financial Results, Business numbers, Productivity ratios , Asset Quality 04 Digital Presence Digital & Risk Management systems, Di
Slide 42: Robust technology and digital platforms
Robust technology and digital platforms Pioneer in implementing “Finacle” (CBS) State-of-art IT set up which has enabled Anytime Anywhere Banking through alternate amongst first generation private sector banks delivery channels such as ATMs, VISA International Debit Card, RUPAY Debit Card, Internet
Slide 43: KBL Digital Centre of Excellence
KBL- KBL- Digital Digital Centre Center of Excellence of Excellence (DCoE) Accelerating Digital Transformation Catalyst Digital Leads Enabling reach digitally • 30,000+ customer queries addressed 2500+ as a Xpress Loan assistance. Risk Reduction Improving Asset Quality • 24000+ customers benefiting
Slide 44: 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 Journeys Xpress MSME Term Loan CV Loan Xpress SB • - DhlRA XeD ABCO X- PAWS Customer Assis
Slide 45: Digital adoption and underwriting
Digital adoption and underwriting 93.04 % of customer transactions are through Digital means ,. itl KBL KBL Xpress Xp ess Home Loans .I4.56 Home Loans ,.... ..»..- --- • .t ~. 4. 56,. , Customer Rating 5 point Scale ~ :;' 74% ~ KBL KBL Xpress Xpress Car Car Loans oans 79% Digital 72% KBL Xpress MSME
Slide 46: Mobile Banking
Mobile Banking No. of Regd users (Actuals as at the end of the quarter) 2,604,944 2,385,999 1,962,138 1,611,054 1,366,082 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 No. of transactions during the quarter Value of transactions during the quarter 55 - No. of Transactions (in 000’s) 61 66 - Avg. Transactions p
Slide 47: Debit Cards Penetration
Debit Cards Debit cards Penetration Position during the quarter 88.42% 89.40% - Total cards issued (Lakhs) - Penetration (%) 87.21% 87.01% 51.55 86.51% 51.85 51.68 51.13 50.34 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Total ATM transactions by our Debit Card holders ■ KBL ATM (lakhs) ■ Shared Network (VISA
Slide 48: UPI Transactions
UPI Transactions BHIM KBL UPI Txns count - 1,610 Position during the quarter No. of Transactions (in 000's) 1,811 - Avg. Transactions per day (in 000's) 2,263 2,550 232094 1,331 208231 164850 148,148 121,076 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 KBL BHIM UPI - - BHIM KBL UPI Txn Value Value of Transact
Slide 49: POS and ECOM Transactions
POS and ECOM Transactions Position during the quarter - No. of Txn ('000s) ■60 ---- Avg per day ('000s) 61 63 63 - Value of Txn (Crore) - Avg per day (Crore) POS Transactions 9.0 9.0 9.0 8.0 42 6.2 5,708 5,662 5,538 5,500 815 845 849 3,790 762 563 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Jun-21 Sep-21 Dec
Slide 50: Digital initiatives during Q1 FY23
Digital initiatives during Q1 FY23 Online Savings account opening through Video KYC 1 2 Restricted Access facility in Mobile Banking- Self registration without debit card 4 Introduction of Security tips in Introduction of ‘Hindi’ language in Mobile Banking 3 Mobile Banking Implementation of upgraded
Slide 51: Effective Risk Management Systems
Effective Risk Management Systems Dedicated Market Intelligence Unit ISO 9001: 2015 (MIU) for sourcing intelligence Bank’s Risk Management practices and from external sources on Effective ALM/mid office to borrowers with exposure ₹100 processes have been accredited with monitor Liquidity risk/ Crore
Slide 52: Business Strategy
Table of contents 1 01 Highlights Q1 FY23 Financial headline numbers and Key ratios 02 Company Overview Evolution, Presence and Timeline 03 Financial Performance Q1 FY23 Financial Results, Business numbers, Productivity ratios , Asset Quality 04 Digital Presence Digital & Risk Management systems, Di
Slide 53: Focus areas for the FY 2022-23
KBL @ 99 Focus areas for the FY 2022-23 Implementation of KBL-NxT Opening of DBUs (KBL- VIKAAS 2.0 and Cyber Fraud (Digital Banking Units) Management) as per RBI Guidelines Integrated Management of Growth Management- Asset Quality Credit & CASA Including garnering Government business SMA, NPA, Restr
Slide 54: Projects in pipeline for Impact NxT
Projects in pipeline for Impact NxT @ One Place Account MSME Banking AA Aggregator* Platform Comprehensive Financial Data @ One Place S.E.E.D Comprehensive Financial services @ One Place Secure & Compliant Ease & Experience Efficient & Empowered Disrupt & Transform Analytical KYC Centre Of Automatio
Slide 55: Business Strategy- KBL @ 100 for FY 2023-24 and beyond
Business Strategy- KBL @ 100- for FY 2023-24 and beyond… KBL VIKAAS 3.0 Digital Bank of the Future New transformation journey End to end digital solutions under KBL-NxT 54
Slide 56: Board Of Directors
Board Of Directors Mr Pradeep Kumar Panja Mr Mahabaleshwara M S Part-Time Chairman Managing Director & CEO (Independent Director) Mr Keshav Krishnarao Desai Mrs Mythily Ramesh CA B R Ashok Independent Director Independent Director Non-Independent Director T ------------------------------------------
Slide 57: 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 KARNATAKA BANK “A DIGITAL BANK OF THE FUTURE”. 56
Slide 58: 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