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Informist, Tuesday, Oct. 15, 2024

By Pratiksha

NEW DELHI – Karur Vysya Bank's net profit is seen rising 19.7% on year to INR 4.53 billion for the quarter ended September on the back of steady loan growth and stable asset quality, according to an average of estimates of six brokerages. The bank reported a net profit of INR 3.78 billion a year ago and INR 4.59 billion in the previous quarter. 

The estimates for net profit of the bank in Jul-Sept. range from INR 4.33 billion to INR 4.73 billion. Karur Vysya Bank is scheduled to announce its earnings for the September quarter on Thursday.

The Tamil Nadu-based private bank's advances were up 14.0% on year at INR 802.96 billion as on Sept. 30, as per provisional figures released by the bank on Oct.1. "We expect an unchanged headline gross and net NPL (non-performing loans) ratios, but slippages likely to be at approximately 1.3% (INR 2.5 billion), with no major concerns in the commentary on asset quality," Kotak Institutional Equities said in a pre-earnings report. The bank's asset quality improved in the previous quarter, with the gross non-performing asset ratio falling to 1.32% as of Jun. 30 from 1.99% a year ago. The bank's net non-performing asset ratio fell to 0.38% from 0.59% a year ago.
 

The bank's net interest income is seen rising 13.7% on year to INR 10.41 billion in the quarter ended September, according to an average of estimates of the six brokerages. "NII growth will be slightly slower than average loan growth due to rise in cost of deposits outpacing yield on advances," YES Securities (India) Ltd. said in its pre-earnings report. "Consequently, NIM (net interest margin) will be slightly lower sequentially," YES Securities said.

Most brokerages expect the bank's NIM to fall in Jul-Sept. Kotak Institutional Equities expects Karur Vysya Bank's NIM to fall 10-15 bps from Apr-Jun because of the higher cost of funds. Emkay Global Financial Services Ltd. expects the bank's net interest margin at 4.1% as of Sept. 30, from 4.13% a quarter ago. "We believe margins could slip a bit, but the bank should be able to deliver 1.6-1.7% RoA (return on assets); slippages could remain range bound," the brokerage said in a pre-earnings report.

YES Securities expects the lender's slippages and provisions to be broadly stable on a sequential basis. The bank's provisions and contingencies fell 16.6% on year to INR 1.3 billion in Apr-Jun.

Tuesday, shares of Karur Vysya Bank closed 0.4% lower at INR 203.30 on the National Stock Exchange of India Ltd. Following are the Jul-Sept earnings estimates of Karur Vysya Bank based on reports compiled by Informist from six brokerage houses:

End

Edited by Deepshikha Bhardwaj

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