Karnataka Bank Ltd. share price target

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%.

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 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...

Karnataka Bank (KBL) clocked in decent profitability in Q1FY19 on back of improved opex and reduction in slippages (2.3% vs 9% QoQ). PAT improved from Rs 11cr to Rs 130cr QoQ. Loan growth sustained and grew 24% led by corporate segment.

We retain Buy on Karnataka Bank (KBL) with TP unchanged at Rs180. Q1'19 results, albeit lower to our estimates on revenue front, were inline on both operational and profitability end. Slippages came in lower (2.3% of loans); provisions included accelerated coverage on NCLT cases (76% vs. 48% QoQ). Segments of MSME and corporate banking have shown signs of improvement; we expect traction therein to continue. Stressed asset pool has reduced to 3.8% of loans; we see loan loss provisions to remain contained at 120bps. We expect earnings growth to accelerate...

Q4FY18 has been remained challenging for banking industry and Karnataka Bank Ltd. (KBL) is no exception as the RBI released strict norms during Feb'2018 in order to fasten the pace of NPAs recognition and resolution of stressed assets. KBL has recognized outstanding SDR exposure of Rs1.9bn and S4A exposure of Rs3.44 bn as NPAs in Q4FY18. Provisioning against NCLT a/c of worth Rs3.19 bn (already recognized as NPA) increased to Rs1.64 bn with PCR increased to 53% v/s ~27% in previous quarter. Furthermore, the bank recognized MTM losses on investment portfolio despite RBI's dispensation on spreading the losses across next four...