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Informist, Monday, May 19, 2025

By Pratiksha

NEW DELHI – Beating Street estimates, Karur Vysya Bank's net profit for the March quarter rose on year owing to a sharp drop in provisions. However, a rise in interest expenses ate into the lender's bottom line, the bank's quarterly results released Monday showed.

Karur Vysya Bank's bottom line for Jan-Mar rose 12.6% on year and 3.5% on quarter to INR 5.13 billion. The net profit of the bank was seen rising 7.2% on year to INR 4.89 billion for the quarter, according to the average of estimates by seven brokerages.

The Tamil Nadu-based bank's provisions and contingencies declined 45% on year to INR 1.61 billion in the reporting quarter. Its provision coverage ratio was 96.81% as of Mar. 31, against 94.85% a year ago.  

The lender's total expenses during the quarter under review rose 12.5% on year to INR 21.90 billion. Of this, interest expenses increased 20% on year to INR 14.27 billion.

The bank's total income for the reporting quarter rose 7.5% on year to INR 30.25 billion on the back of a 15% on-year jump in interest income to INR 25.16 billion. However, the other income fell 18.7% on year to INR 5.09 billion.

The bank's net interest income--the difference between interest earned and expended--for the quarter rose 9% on year to INR 10.89 billion. Net interest income was seen rising 9.4% on year to INR 10.89 billion in the quarter, according to the average of estimates by the seven brokerages.

The lender's asset quality improved both sequentially and annually, with the gross non-performing asset ratio declining to 0.76% as of Mar. 31, from 0.83% at the end of December and 1.40% as on Mar. 31, 2024. The net non-performing asset ratio was 0.20%, unchanged from Dec. 31 and down from 0.40% at the end of March 2024. 

Steady growth in loans also boosted the private-sector lender's bottom line. The bank reported 14% on-year growth in gross advances to INR 844.91 billion as of Mar. 31, which is its highest ever. Within loans, commercial loans grew at the fastest pace, posting a year-on-year increase of 21% to INR 307.30 billion. Retail advances grew 18% on year to INR 208.96 billion, and agricultural loans were up 20% on year at INR 208.18 billion. Corporate loans, meanwhile, fell 14% on year to INR 120.47 billion as of Mar. 31. 

Karur Vysya Bank's deposits were up 15% on year at INR 1.02 trillion as of Mar. 31, which was also its highest on record. Of the total liabilities, the largest chunk comprised term deposits, which rose 20% on year to INR 742.46 billion in the reporting quarter. The bank's current account savings account ratio, however, edged lower to 27.27%, from 28.41% at the end of the previous quarter and 30.39% a year ago. The bank's net interest margin was 4.05% in the March quarter, down from 4.04% a quarter ago, and 4.20% a year ago. 

Karur Vysya Bank's Basel-III capital adequacy ratio was at 18.17% as of Mar. 31. The bank's board of directors has recommended a dividend of INR 2.60 per equity share. 

For the financial year 2024-25 (Apr-Mar), the lender's net profit rose 21% on year to INR 19.42 billion, and total income increased 16.7% on year to INR 115.08 billion. On Monday, shares of Karur Vysya Bank ended slightly lower at INR 225.47 on the National Stock Exchange. The bank announced its results after market hours.  End

Edited by Rajeev Pai

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