Karnataka Bank Ltd. share price target

NII grew to Rs. 541.51 Cr in Q4FY18 compared to Rs. 451.48 Cr in Q3FY18. Karnataka Bank Ltd Q4FY18 results Comment

Karnataka Bank (KBL) reported a robust operational performance in Q3FY18 with 20%YoY jump in NII supported by NIMs (up 25bps) and loan growth (24% YoY). Rise in other income by 46% led to better PAT even as higher provisioning (though lower from Q2FY18) continued.

Q3FY18 Result Analysis: Net interest income increased by 19.9% YoY and 2.6% QoQ in Q3FY18 (10.8% YoY and 3.7% QoQ inQ2FY18). Though interest income grew by 0.6% YoY amidst the implementing strategy to maintain competitive MCLR rate, this offset by (-)7.0% YoY decline in the interest cost despite the decline in low cost deposits as rationalization of deposits rates benefitted the bank on this front. Thereby NIM which improved by 6bps QoQ to 3.09% was mainly driven by the robust growth in NII. Owing to the (-)4.2% decline in operating expenditures, cost-to-income (C/I) ratio reduced to 50.2% in the...

We retain Buy on Karnataka Bank (KBL) and revise our TP upwards to Rs240 (valued at 1.3x FY20E ABV). Q3'18 results surprised on upside with a) strongest ever loan growth (24.1% YoY / 8% QoQ) ; b) further expansion in margins (3.04%; 25bps YoY) c) decline in slippages-run rate (1.9% annualised) and d) stressed asset portfolio down to 7%. Commentaries on each of the above key parameters remain encouraging and we have factored the same into our estimates. This is even as near-term earnings are set to remain under-pressure following accelerated provisions. We have introduced FY20 estimates and see our RoE's...

Karnataka Bank (KBL) operating parameters were strong on all fronts with loan growth acceleration, margins improvement, strong fee income growth and moderation in slippages. Commentaries on each of the above key parameters remain encouraging.

Assets quality remains stable: Gross slippage at Rs3,740 mn showed improvement with slippage rate declined to 0.98% (1.35% in previous quarter). During the quarter 1 SDR a/c of housing infra sector of worth Rs2,300 mn was downgraded to NPA and management asserted of carrying adequate provision against it. During the quarter, R&U; remained at Rs3,490 mn leading to net addition of Rs250 mn of GNPAs during the quarter and GNPA ratio reduced by 22 bps to 4.13% v/s 4.34% in previous quarter. Stressed assets (GNPA + watch list) reduced to 7.5% v/s 8.9% in Q1FY18. Substandard NPAs represented around 51.3% of GNPAs in Q2FY18 v/s...

NII grew to Rs. 440.24 Cr in Q2FY18 compared to Rs. 424.42 Cr in Q1FY18 NII grew to Rs. 440.24 Cr in Q2FY18 compared to Rs. 424.42 Cr in Q1FY18

Karnataka Bank Ltd. (KBL), incorporated in 1924, is one of the oldest private sector banks in India. With the 769 branches and 1,398 ATMs spread across India and employee strength of 7,982, the bank provides entire spectrum of the financial services to customer segments covering large and mid-corporates, MSME, agriculture and retail businesses. As the name suggests, KBL is a Karnataka based bank driving major business from the home state on the back of extensive presence with 62% of branches locating in state. KBL attained a balance sheet size of Rs641 bn in FY17 with...