Karnataka Bank slips after weak Q3 earnings

Karnataka Bank fell 3.89% to Rs 75.40 after net profit fell 12.3% to Rs 123.14 crore on 11.4% rise in total income to Rs 2,023.68 crore in Q3 December 2019 over Q3 December 2018.

PBT (profit before tax) fell 2.2% to Rs 187.09 crore in Q3 December 2019 as against Rs 191.38 crore in Q3 December 2018. The Q3 earnings was declared after market hours yesterday, 16 January 2020.

Net Interest Margin (NIM) fell to 2.83% in Q3 December 2019 as against 2.94% in Q3 December 2018. Current Account-Savings Account (CASA) rose to 27.39% in Q3 December 2019 over 26.65% in Q3 December 2018.

Gross non-performing assets (NPAs) stood at Rs 2,777.46 crore as on 31 December 2019 as against Rs 2,594.27 crore as on 30 September 2019 and Rs 2,345.93 crore as on 31 December 2018.

The ratio of gross NPAs to gross advances stood at 4.99% as on 31 December 2019 as against 4.78% as on 30 September 2019 and 4.45% as on 31 December 2018. The ratio of net NPAs to net advances stood at 3.75% as on 31 December 2019 as against 3.48% as on 30 September 2019 and 3% as on 31 December 2018.

Provisions and contingencies (excluding tax provisions) 50.58% to Rs 314.70 crore in Q3 December 2019 over Q3 December 2018. Provision coverage ratio of the bank was at 59.34% as on 31 December 2019.

Commenting on the results, Mahabaleshwara M S, the managing director & CEO of the bank, said, "Bank has been able to deliver a consistent and steady Q3 numbers. Bank has also improved its Provision Coverage Ratio (PCR) to 59.34% from 57.20% (as on Dec 2018) mainly on account of improved operating profit. Further, the credit growth in retail and mid corporate sector is at 11.71% and going forward this sector would continue to be the growth engine. Bank has also started digital sanction of retail loans such as Home, Auto and Personal loans and are now happening in just 5 to 20 minutes and the same will be extended to MSME loans in the days to come."

Karnataka Bank is engaged in providing a range of banking and financial services, including retail, corporate banking and para-banking activities in addition to treasury and foreign exchange business. It operates in four segments: treasury, corporate/wholesale banking, retail banking and other banking operations.

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