The Karnataka Bank (KTKBANK) Q4 02/03 earnings summary

Executive summary

• FY03 net profit rose 20.84% to Rs.110.12 crore; deposits and advances expanded, while income growth was moderated by lower interest rates and higher provisions.

• Total business exceeded Rs.12,000 crore; a 22% dividend was recommended, and the FY04 goals were deposits of Rs.10,000 crore and advances of Rs.5,000 crore.

Financial highlights

• Total income rose 6.75% to Rs.1,050.70 crore; interest earned was Rs.811.47 crore and other income Rs.239.23 crore.

• Operating profit increased to Rs.253.37 crore from Rs.250.88 crore; net profit rose to Rs.110.12 crore from Rs.91.13 crore, up 20.84%.

• Interest expense increased 8.93% to Rs.656.61 crore; operating expenses were Rs.140.72 crore, 13.39% of income, and provisions and contingencies totaled Rs.143.25 crore.

• Deposits grew 18.43% to Rs.8,291.72 crore; net advances rose 14.11% to Rs.3,899.70 crore and investments increased 27.85% to Rs.4,432.61 crore.

Outlook and guidance

• FY04 corporate goals: deposits of Rs.10,000 crore and advances of Rs.5,000 crore, supported by improved customer service and operating efficiency.

• Credit expansion was expected to benefit from signs of industrial recovery and lower energy costs; drought conditions remained a drag on economic growth.

• Priorities included containing NPAs, recovering impaired advances under the 2002 securitisation law, cautious lending to high-NPA industries, and expanding retail banking and ATM access.