Karur Vysya Bank (KVB) has said it expects double-digit credit growth of 15% for FY’23, riding on the robust performance in the second quarter, coupled with the anticipated positive business sentiment.
KVB MD & CEO B Ramesh Babu told analysts during an earnings call that the bank’s performance on business growth, profitability an asset quality are on the right trajectory.
“We have indicated a loan book growth of 15% for the current financial year and we have achieved an year-on-year growth of 16% in the second quarter. We expect the trend to continue in the current (third) quarter, considering the busy season, fairly good monsoon and structural changes implemented over a period of time which have now started yielding favourable results,” he said. KVB had last week reported a 52% increase in its net profit to `250 crore for the second quarter from `165 crore in the corresponding quarter of previous fiscal The bank posted a a total income of `1,063 crore as compared to `845 crore, marking an increase of 26%.
Babu said the bank’s gross slippage of `131 crore in Q2FY23 is in line with its expectation and accounts for less than 1% of the advances. “Our recovery has surpassed the slippages in the quarter, presenting negative slippages of `74 crore. This is the fifth consecutive quarter where the bank was able to maintain the trend of negative slippages,” he said.
According to him, recoveries are showing the trend of uptick. Due to lower sippages, and technicl write-offs, the gross NPA has come down to 3.97% and the bank’s plan is to reduce it to below 3% level by March 2023. “ Similarly our net NPA has come down to 1.36% and it is our endeavour to bring it down to below 1% by March 2023,” he said.He said the bank’s co-lending business with two NBFCs is doing well and is rolling out the initiative with two more NBFCs soon.
“We have tied up with a couple of fintech companies for customer on-boarding, we are working with three more fintechs which will be rolled out in this financial year,” he said.
With the need to strengthen the bank’s liability business, particularly to take the CASA mix to 40% of the total deposits, KVB has created a consumer banking department. “We have opened an exclusive retail branch in Hyderabad, which will mainly cater to consumer banking segment and will focus on retail loans and deposits. We plan to open 18 more retail branches during the current fiscal,” he said.