KVB posts 45% increase in net profit in FY24 on higher income and lower provisions

Posted on by

Karur Vysya Bank has maintained its strong double-digit growth in its net profit for the March 2024 quarter and the full year of FY24, while maintaining its asset quality.

The old private sector bank’s Board has recommended a dividend of ₹2 per equity share of face value of ₹2 each for the year ended March 31, 2024.

KVB has posted a 45 per cent increase in net profit at ₹1,605 crore for the year ended March 31, 2024, when compared with ₹1,106 crore in FY23, buoyed by a good increase in net interest income and other income and lower provisions.

The operating profit of the bank grew 14 per cent at ₹2,829 crore in FY24 as against ₹2,476 crore in the previous year.

Provisions and contingencies

Net interest income grew 14 per cent to ₹3,809 crore (₹3,349 crore), while net interest margin stood at 4.19 per cent when compared with 4.18 per cent. Other income rose 43 per cent to ₹1,659 crore (₹1,159 crore). Provisions and contingencies dropped to ₹729 crore in FY24 (₹1,039 crore in FY23).

“We have performed consistently to deliver the highest ever annual net profit of ₹1,605 crore for FY23-24. Credit cost has improved on the back of continued strong asset quality, with GNPA and NNPA at 1.40 per cent and 0.40 per centrespectively. Broad-based business growth coupled with core revenue profile has yielded in higher Return on assets (ROA), currently at 1.63 per cent for the year and 1.76 per cent for the quarter,” Ramesh Babu B, Managing Director and CEO, Karur Vysya Bank said.

Asset quality

For the March 2024 quarter, the bank’s net profit grew by 35 per cent to ₹456 crore as against ₹338 crore in the year-ago quarter. Operating profit increased by 17 per cent at ₹868 crore (₹739 crore).

Net interest income grew by 12 per cent at ₹996 crore (₹893 crore).

Gross NPA declined to 1.4 per cent (₹1,042 crore) in the March 2024 quarter when compared with 2.27 per cent a year ago. GNPA stood at 1.58 per cent as of December 31, 2023. Net NPA remained below 1 per cent at 0.40 per cent in Q4 of FY24, down from 0.74 per cent a year ago and 0.42 per cent in the preceding quarter. 

Also read: Piramal Group invests ₹600 crore in Annapurna Finance

Its total business stood at ₹1,63,536 crore in Q4FY24 when compared with ₹1,40,806 crore a year ago, an increase of 16 per cent. The yield on advances grew to 9.93 per cent from 8.83 per cent.

“Credit cost for FY24 was at a new low at 65 bps. We are now on the path to sustained growth momentum with various enablers in place,” said Babu.