NEWS
Karur Vysya eyes 18-20% loan growth, NIM expansion in FY27
Karur Vysya to cap high-value corporate credit at 20% and will be cautious on gold loans which comprise 26% of total advances; bank’s Q2 net profit up 37% to Rs 788 crore.
Karur Vysya to cap high-value corporate credit at 20% and will be cautious on gold loans which comprise 26% of total advances; bank’s Q2 net profit up 37% to Rs 788 crore.
Tamil Nadu-based Karur Vysya Bank (KVB) is targeting 18-20% growth in advances in FY27 while being cautious on gold loans.
Gold loans, which stood at Rs 32,153 crore as on 30 September to account for around 26% of the bank’s advances, will still have space for aggressive growth. The bank has set an internal exposure limit of taking it up to 32% of total advances, down from its earlier capping target of 35%.
The growth focus will continue to be on the RAM (retail, agriculture and MSME) segment, which accounts for 86% of the bank’s advances.
The corporate segment, which makes up the balance 14%, will also see a push but high-value loans will be capped at around 20% to avoid large-ticket exposures and be selective in consortium lending. Commercial real estate, trade, food processing, spinning mills and transport provide lending opportunities. The exposure to non-banking financial companies (NBFCs) has fallen to around 4% of the loan book from over 8% earlier, as the bank has decided to lend to selective NBFCs.
The bank’s gross advances rose 20% year-on-year to Rs 1.20 lakh crore at the end of the September quarter while deposits were up 16% to Rs 1.28 lakh crore, taking the total business to Rs 2.40 lakh crore, up 18%.
For the fiscal second-quarter ended September, the private lender’s RAM loans grew 20% YoY to Rs 95,576 crore. Retail loans grew 21% YoY to Rs 29,024 crore, while MSME rose 19% to Rs 39,407 crore and agriculture 20% to Rs 27,145 crore.
On the deposit front, CASA (current account savings account) ratio declined marginally to 27.52% from 27.55 a quarter ago and 27.65% a year earlier.
The bank’s net profit for the September quarter was Rs 788 crore, up 37% from the year-ago period. Net interest income (NII) rose 19% to Rs 1,497 crore while net interest margin expanded to 4.26% from 3.77% a year ago.
The bank has raised its net interest margin (NIM) guidance to above 4% in the full fiscal from 3.7–3.8% earlier amid stable asset quality and a rising interest rate scenario. Around 57% of the loan book is EBLR-linked and will, thus, get repriced.
The bank’s gross non-performing assets (NPA) declined to 0.69% from 0.74% in the preceding quarter, while its net NPA contracted marginally to 0.18% from 0.19%.
The bank has raised around Rs 680 crore via FCNR(B) deposits under the Reserve Bank of India’s forex swap facility.
