InvestorQ : How did the net profit of Karur Vysya Bank almost double in the Sep-20 quarter compared to last year?
vidhya Laxmi made post

How did the net profit of Karur Vysya Bank almost double in the Sep-20 quarter compared to last year?

Answer
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3 weeks ago
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KVB reported 8.21% lower revenues for the Sep-20 quarter at Rs.1,666 crore. While operating profits were up marginally by 4.08% at Rs.449 crore, the net profits were up a whopping 81.4% at Rs.115 crore. This was due to Rs.80 crore of lower provisioning.

You could see the impact on the margins also. OPM was up 300 bps at 26.93% while NPM doubled to 6.90%. Gross NPAs at 7.93% showed a reducing trend but still high in absolute terms. Even net NPAs at 3% are too high for comfort. You must be careful on this aspect.

Capital adequacy is fairly comfortable at 18.4% and offers room to expand the loan book. At the same time, the ROA at 0.63% positions KVB in the best in class private banks. Focus should be more on the NPA front.

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