KVB net up 20% in Q1, to focus on improving CASA

Karur Vysya Bank Limited (KVB) registered a 20.09 per cent growth in net profit to Rs 84.48 crore for the first quarter ended June 30, as compared with Rs 70.35 crore in the same period last year.

Total income wa up 11.67 per cent to Rs 544.27 crore from Rs 487.37 crore. Total deposits increased 32.92 per cent to Rs 20,274 crore as against Rs 15,253 crore while advances stood at Rs 14,191 crore, a growth of 28.16 per cent over Rs 11,073 crore a year ago. 

Addressing the bank's 91st annual general meeting at Karur on Wednesday, managing director and chief executive officer P T Kuppuswamy said the bank was targeting a total business of Rs 1.25 lakh crore by the turn of the centenary celebrations (2016). For this, it has engaged Boston Consulting Group for business process re-engineering. The consultant has already submitted preliminary reports and the implementation process has commenced.

The bank's total business as on March 31, 2010, stood at Rs 32,946.85 crore, an increase of 28.38 per cent year-on-year. It is planning to increase this to Rs 50,000 crore by March 31, 2012.

The increased focus on casa (current account, savings account) saw the bank's low cost deposit segment grow 37 per cent.  While the savings base rose to Rs 2,484.67 crore during the year from Rs 1,808.82 crore the previous year, demand deposits grew from Rs 1,496.77 crore to Rs 2,050.53 crore.

“Our focus will be on improving CASA and advances segments and emphasis will be on customer acquisition,” he added. By March 2011, the bank plans to have 385 branches from the current 340.

On whether the bank would raise capital to meet the business target, Kuppuswamy said, “Our net owned fund is around Rs 1,700 crore, including the recently pumped in Rs 50 crore. This will be enough to meet our business target.”

Brushing aside rumours that the bank was looking at dilution, he said, “a few people have suggested to us, but we never thought and not even once the board had discussed.”