KARUR VYSYA BANK 2023-24 Annual Report Analysis

Mon, 29 Jul

KARUR VYSYA BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

KARUR VYSYA BANK Income Statement Analysis

• Interest income during the year rose 25.9% on a year-on-year (YoY) basis.
• Interest expenses were up by 38.7% YoY during the same period.
• Operating expenses increased by 29.9% YoY during the year.
• The bank's net interest income (NII) increased by 13.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 4.0% in FY24 as against 4.1% in FY23.
• Other income increased by 43.1% YoY during the year.
• Net profit for the year increased by 45.1% YoY.
• Net profit margins during the year increased to 19.6% in FY24 from 17.0% in FY23.

KARUR VYSYA BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	65,166	82,039	25.9%
Other Income	Rs m	11,589	16,587	43.1%
Interest Expense	Rs m	31,677	43,947	38.7%
Net Interest Income	Rs m	33,488	38,092	13.7%
Operating Expense	Rs m	20,320	26,388	29.9%
Pre-provision Operating Profit	Rs m	24,758	28,291	14.3%
Provisions & Contingencies	Rs m	13,697	12,243	-10.6%
Profit before tax	Rs m	14,369	21,002	46.2%
Tax	Rs m	3,308	4,954	49.8%
Profit after tax	Rs m	11,061	16,048	45.1%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	4.1	4.0
Net profit margin	%	17.0	19.6

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KARUR VYSYA BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 891.1 bn as compared to Rs 766.4 bn in FY23, thereby witnessing an increase of 16.3%.
• Advances for the year stood at Rs 736.7 bn as compared to Rs 631.3 bn during FY23, a rise of 16.7%.
• Cost of deposits for KARUR VYSYA BANK rose 18.5% and stood at 4.7%, while yield on advances rose to 9.3%.
• The lender's investments rose to Rs 223.4 bn during the year from Rs 188.1 bn in FY23.
• Borrowing stood at Rs 24.8 bn, a growth of 73.1% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 1,055.9 bn as against Rs 901.8 bn during FY23, thereby witnessing a rise of 17.1%.

KARUR VYSYA BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	85,818	100,359	16.9%
Advances	Rs m	631,341	736,675	16.7%
Deposits	Rs m	766,376	891,127	16.3%
Yield on advances	%	8.4	9.3
Cost of Deposits	%	4.0	4.7
Investments	Rs m	188,083	223,435	18.8%
Borrowings	Rs m	14,320	24,784	73.1%
Total Assets	Rs m	901,794	1,055,852	17.1%

Current Valuations for KARUR VYSYA BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 20.0, an improvement from the EPS of Rs 13.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 223.8, stands at 7.5 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.8 times, while the price to income ratio stands at 1.5 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	81.2	102.0
Earnings per share (Unadj.)	Rs	13.8	20.0
Diluted earnings per share	Rs	13.7	19.9
Avg P/E ratio	Rs	5.7	7.5
Avg P/ABV ratio	Rs	1.2	1.8
Avg Market Cap	Rs	63,262	119,792
Dividends per share (Unadj.)	Rs	2.00	2.40

Ratio Analysis for KARUR VYSYA BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 82.7x during FY24, from 82.4x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 9.13x during FY24, from 9.10x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): KARUR VYSYA BANK's capital adequacy ratio (CAR) was at 16.7% as on 31 March 2024 as compared to 18.6% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 16.0% during FY24, from 12.9% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.52% during FY24, from 1.23% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 20.15% during FY24, from 16.23% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. KARUR VYSYA BANK's gross NPA ratio stood at 1.4% as of 31 March 2024 compared to 2.3% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of KARUR VYSYA BANK was 0.4% in financial year 2024. This compared with 0.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	82.4	82.7
Debt to Equity Ratio	x	9.1	9.1
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	18.6	16.7
Return on Equity	%	12.9	16.0
Return on Assets	%	1.2	1.5
Return on Capital Employed	%	16.2	20.1
% of Gross NPAs	%	2.3	1.4
% of Net NPAs	%	0.7	0.4
Yield on Advances	x	8.4	9.3
Yield on Investments	x	6.0	7.3

To see how KARUR VYSYA BANK has performed over the last 5 years, please visit here.

KARUR VYSYA BANK Share Price Performance

Over the last one year, KARUR VYSYA BANK share price has moved up from Rs 124.0 to Rs 223.8, registering a gain of Rs 99.8 or around 80.4%.

Meanwhile, the S&P BSE BANKEX is trading at 59,152.2 (up 0.9%). Over the last one year it has moved up from 51,319.7 to 59,152.2, registering a gain of 7,832.6 points (up 15.3%).

Overall, the S&P BSE SENSEX is up 23.0% over the year.

(To know more, you can check out historical annual results for KARUR VYSYA BANK here and quarterly results for KARUR VYSYA BANK here)