MUMBAI: Tamil Nadu-based old-generation, mid-sized private sector lender Karur Vysya Bank has reported a 28 per cent on-year growth in net income at Rs 459 crore for the June quarter.
The better performance is driven by robust fee and interest income coupled with improved asset quality.
On the back of an over 16 per cent incremental loan sales, net interest income increased 14.27 per cent to Rs 1,025 crore in the reporting quarter, the Karur, Tamil Nadu-based bank said in a statement Thursday.
Gross non-performing assets improved by 67 bps to 1.32 per cent or Rs 1,025 crore from 1.99 per cent in June 2023 or Rs 1,330 crore and the net non-performing assets declined to 0.38 per cent or Rs 294 crore, from 0.59 per cent or Rs 390 crore in June 2023.
Due to a spike in the cost of funds, to the tune of 52 bps (one basis point is a hundredth of a per cent), the key profitability gauge net interest margin stands declined by 6 bps to 4.13 per cent in the reporting quarter.
Cost of deposits increased by 52 bps to 5.48 per cent from 4.96 per cent in the corresponding quarter of the previous year, the lender said, adding the cost-to-income ratio for the quarter stood at 47.20 down from 47.29.
While loan book grew by 16.06 per cent on-year to Rs 77,710 crore deposits rose 14.41 per cent to Rs 92,349 crore, of which the low-cost Casa grew 5.62 per cent to 30.37 per cent, taking the total business of the bank up by 15.16 per cent at Rs 1,70,059 crore.
The bottom line was also boosted by a healthy 16.5 per cent jump in other income.
Commenting on the numbers, Ramesh Babu B, the managing director of the bank, said, during the quarter they could deliver on all three metrics - growth, profitability and asset quality.
Commission and fee-based income have improved by 18.05 per cent to Rs 242 crore while operating expenses rose to Rs 667 crore from Rs 582 crore.
The bank’s provision coverage ratio stood at 94.91, up from 93.41 in June 2023. The bank has 840 branches and one digital banking unit and 2,253 ATMs/cash recyclers as against 808 branches and 2,240 ATMs/ cash recyclers in June 2023.