Karur Vysya Bank Ltd. share price target

KVB's 1QFY18 results were in line with expectations. While PAT remained flat YoY and loan growth remained 7.7%, overall growth should pick in 2HFY18. While slippages were high during the quarter, they were largely from the watch list. Next two quarters could be challenging but FY19 looks much stronger for the bank. While credit cost will ..

Asset Quality deteriorated with GNPAs increasing sharply by 69bps QoQ to 4.27% and NNPAs increased by 32bps QoQ to 2.85%. This sharp increase was majorly on account of slippages from the corporate book. Outstanding restructured loans stands reduced to INR 8.1bn (1.91% of advances) vs. INR 8.4bn in 4QFY17. Total outstanding SDR loan accounts...

Karur Vysya Bank (KVB) reported strong profits of Rs.218 cr which grew by 58% YoY (up 88% QoQ) due to profit on sale of investments of Rs.78 cr. Loan growth improved to 5% YoY in FY17 as against 2% YoY in 9MFY17 led by growth in commercial book (up 13.6% YoY).

Deposits registered a stable growth (7.2%YoY, -2.5%QoQ) to INR 537bn, driven by CASA NII grew steadily by 22.7%YoY to INR 5.8bn lead by lower interest expense (-4.9%YoY) on account of fall in cost of funds. Increase in share of CASA aided NIM expansion as it increased by 49bps YoY to 4.04% amidst drop in cost of funds by 85bps YoY to 6.03% and...

Karur Vysya Bank (KVB) is one of the oldest private sector banks with strong presence in the Southern parts of India. More than 53% of KVB's 706 branches are located in Tamil Nadu, however it is gradually branching out in other parts of India also. KVB's earnings were impacted due to higher provisions and lower business growth, however, w..

Background: Karur Vysya Bank (KVB) is one of the mid-sized banks in the private sector space, operates through a network of 706 branches and about 1,711 ATMs. KVB's business - 82% is concentrated in South India with about 73% of its branch footprint in Tamil Nadu and Andhra Pradesh. As of 3QFY17 the total business stood at INR 935bn. The bank is capitalized with a total CAR of 11.93% (Basel III). Gross NPAs were reported at 2.66% with provision...

Background: Karur Vysya Bank (KVB) is one of the mid-sized banks in the private sector space, operates through a network of 688 branches and about 1,693 ATMs. KVB's business - 82% is concentrated in South India with about 73% of its branch footprint in Tamil Nadu and Andhra Pradesh. As of 2QFY17 the total business stood at INR 915bn. The bank is capitalized with a total CAR of 11.44% (Basel III). Gross NPAs were reported at 2.29% with provision...

Background: Karur Vysya Bank (KVB) is one of the mid-sized banks in the private sector space, operates through a network of 675 branches and about 1,674 ATMs. KVB's business - 82% is concentrated in South India with about 73% of its branch footprint in Tamil Nadu and Andhra Pradesh. As of 1QFY17 the total business stood at INR 901bn. The bank is capitalized with a total CAR of 11.67% (Basel III). Gross NPAs were reported at 1.79% with provision...

KVB's advances grew steadily despite tight credit policy at (7.6% YoY, 4.2% QoQ) to INR 395bn led by Commercial (8.4% YoY, 4.8% QoQ), Agriculture (12.7% YoY, 12.5% QoQ) & Retail (12.2% YoY, 4.3% QoQ) with Corporate advances showing a muted growth (2.7%YoY). Consequently, their share in loan mix was noted at 32.3%, 17.8%, 15.0% and...

Ravi Shenoy (ravi.shenoy@MotilalOswal.com); Tel: +91 22 30896865 Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P; Capital....