Karnataka Bank (KBL) reported Net Profits of Rs 135 cr, higher than our estimate of Rs 119cr led by decline in Cost of Deposits (CoD) of 66/11bps YoY/QoQ to 5.4% and lower provisions of Rs 214cr, down 32/34% YoY/QoQ. NIM expanded by 43bps to 3.26% leading NII growth of 21/7% YoY/QoQ, even as yields

Q2FY21 was in-line with expectations with reported PAT at Rs 119cr vs. est. Rs 115cr. While loan growth was flattish, improvement in NIM to 3.08% on lower CoD, led NII growth of 15/7% YoY/QoQ. Deposits growth of 4% was led by CASA, up ~11%. CASA ratio improved to 29.2% from 27.4%, a year ago.

We have revised our estimates to factor in lower C-I and higher other income. We beleive inadequate CAR and high moratorium will weigh on the stock. We recommend a Sell with a TP of Rs 40 (0.22x FY22E ABV).

Earnings to remain muted in FY21. With an expected higher delinquency rate in H2 FY21, credit cost in the medium term is expected to be high. This and the weaker operating performance (attributed to slower business growth) would keep earnings weak in...

Don't see a favorable investment case despite compelling valuation Karnataka Bank reported 4QFY20 results with key pointers being: (1) Weak advances and deposits growth (2) Total opex grew 29% YoY/42% QoQ (3) Moratorium, extended to all eligible customers, was availed by 35% borrowers (4) Slight improvement in asset quality. Per se on the key P&L; items, NII was reported at Rs5,293mn (10% above estimate), up 10% YoY/4% QoQ; PPOP at Rs3,915mn (9% above estimate) was up 21% YoY and down 22% QoQ; PAT was reported at Rs 273mn (57% below estimate), down 56%YoY / 78% QoQ. Weak advances and deposits growth: Advances growth was weak at 4% YoY due to the subdued...

Karnataka Bank (KBL) reported a weak Q4FY20 performance with advances/ deposits growth at 3.9/4.9% YoY, opex growth of 29/42% YoY/QoQ and high morarotium of 47%. Asset quality improved slighlty with G/NNPAs at 4.8/3.1% vs 5/3.8% QoQ. Reported PCR improved to 64.7% compared to 59.3% QoQ.

Karnataka Bank (KBL) Q3FY20 performance was impacted by deteriorating asset quality and higher provisions. Slippages spiked to Rs637cr driven by four large accounts. Corporate book has declined with focus on mid-corporate and retail.

Envisage weak credit growth for FY20, NPAs likely peaking out Karnataka Bank (KBL) reported 3QFY20 results with the key pointers being: (1) Asset quality weakens further, provisioning stays elevated (2) Corporate book declines; focus remains on midcorporate and retail (3) NIM was flat QoQ at 2.83%; expect improvement going forward (See comprehensive conference call takeaways on page 2 for significant incremental colour.) Per se, on the key P&L; items, KBL posted 4% NII growth YoY at Rs5,078mn, PPOP growth of 25% YoY at Rs5,018mn and PAT decline of 12% YoY at Rs1,231mn. We have revised our estimates for...

Karnataka Bank (KBL) second quarter performance was muted. Weaker NII growth and higher credit costs led to disappointing bottomline performance, down 5% YoY to Rs 106cr. Credit costs was up from 1.5% to 1.9% QoQ.

Karnataka Bank (KBL) reported soft operating performance with profitability supported by tax reversal. NII was muted at 3/6% QoQ/YoY on NIM pressure (2.8%) and loan growth slowdown on account of run-down in large corporate segment. Non Interest income was largely aided by treasury income.

Karnataka Bank (KBL) reported 4QFY19 results with the key pointers being: (1) Stock of GNPAs was contained; improving NPAs guidance retained with only 2 accounts majorly concerning (2) Multiple levers on the income front improving yields, traction in TPP tie-ups and liability franchise build-up could drive growth (3) Cost reduction measures, opening low-cost branches and digitalization are likely to support profitability from a cost perspective. (See comprehensive conference call takeaways on page 2 for significant incremental colour.) Per se, on the key P&L; items, KBL posted 5.6% NII growth YoY at Rs4,946mn, PPOP decline of 5.1% YoY at Rs3,500mn and PAT growth of 7.5% YoY at Rs1,754mn. We have revised our estimates for FY20/FY21 and retained Buy rating on KBL, revising our target price on it to Rs118 (from Rs119 earlier)...

A Better Year Ahead Looks Surer Then Ever Karnataka Bank (KBL) reported 4QFY19 results with the key pointers being: (1) NIM contracted 7 bps QoQ and 67 bps YoY to 2.87% but some NIM expansion lies ahead (2) Slippage for the quarter was elevated at Rs 4.44bn but underlying non-recognised stress has declined to a point where it portends lower NPA accretion (3) Staff cost jumped 43.5% YoY due to provisions made due to wage revision and such rapid increase in staff cost is not likely to repeat. (See detailed analyst meet takeaways for significant incremental colour.) Per se, on the key P&L; items, KBL posted 11.2% NII decline YoY to Rs4,809mn, PPOP decline of 31.8% YoY to Rs3,242mn and PAT growth of 461.2% YoY to Rs617mn. We have revised our estimates for FY20/FY21 and...

Loan growth momentum sustained at 17% YoY led by large corporate segment. However, NIM pressure due to interest income reversal restricted NII growth at 8% YoY. C-I moved up on higher staff costs consisting of largely one-offs. GNPAs improved to 4.45% sequentially from 4.66%.

Karnataka Bank (KBL) reported 3QFY19 results with the key pointers being: (1) KBL did not recognize interest income of about ~Rs 300mn, which led to tepid NII growth (2) Barring IL&FS; exposure, which was conservatively recognized as NPA, no new large corporate stress emerged (3) Staff cost jumped 49% YoY due to provisions made due to wage revision and on superannuation and such high delta in staff cost is not repeatable. (See detailed conference call takeaways for significant incremental colour.) Per se, on the results front, KBL posted 8.1% NII growth YoY to Rs4,880mn, PPOP growth of 24.4% YoY to Rs4004mn and PAT growth of 60.7% YoY to Rs1,404mn. We...

KBL reported a mixed performance for Q2FY19. NIM pressure, increase in slippages were disappointing, but strong loan growth with increasing share of high rate portfolio and reduction in stressed asset portfolio is comforting. NII growth was muted at 6% YoY even as loans grew 22%.

Karnataka Bank Ltd Q2FY19 profitability has substantially improved YoY. It has reported PAT of Rs 112 cr. in Q2FY19 vs Rs. 93 cr. in the corresponding quarter of last fiscal year. On a QoQ basis, the net profit fell by 32%. Operating profit of the bank...

We retain Buy on Karnataka Bank (KBL) with TP at Rs160. Q2'19 results were a mixed bag. While lower than expected margins, higher slippages were a few negatives; we draw greater comfort in strong loan growth with increasing share of high rated portfolio, continued traction in fee income and further reduction in stressed asset portfolio. We remain convinced on the KBL transformation journey and believe that valuations at 0.6x...

Karnataka Bank (KBL) reported 2QFY19 results with the key strategic pointers being: (1) Slippage remained under relative control at Rs3.68bn compared with a past 10-quarter average of Rs9.05bn (2) NII growth YoY lagged loan growth owing to yield pressure (yield stood at 9.34% compared with 10.15% in 2QFY18) but management stated that loan re-pricing has just kicked in. NIM is guided to revert to 3%+ by year-end (3) Relatively recent traction in core fee income growth continued at 31% YoY and in-line with earlier guidance for fee income growth of ~30% for FY19 (4) Opex control remains admirable even adjusted for beneficial one-off. (See comprehensive conference call takeaways on page 2; See Management Meet note see initiating...

Karnataka Bank Ltd. (KBL) reported mixed set of numbers for Q1FY19 with strong growth in business and profitability and muted performance on margin front. While, the bank posted 22.0% YoY growth in net profit on the back of low provisioning for NPAs and controlled apex, NIM reduced by 18 bps QoQ to 3.0% and also reported sluggish performance on other income and CASA accretion fronts. Meanwhile advances continue to show strong traction growing by 24% YoY and slippage ratio reduced to 0.6%. Owing to the lower slippage of Rs2,700 mn, GNPA ratio reduced by 21bps QoQ to 4.72% and NNPA stood at 2.92%. Business growth is expected to...