The Karur Vysya Bank (KARURVYSYA) Q4 04/05 earnings summary

Executive summary

• FY05 total business reached Rs.11,413.20 crore; net profit fell to Rs.105.34 crore from Rs.161.05 crore, primarily reflecting investment depreciation and amortization amid rising yields.

• Deposits and advances grew, while net NPA ratio improved; proposed dividend remained at 100% for a second consecutive year.

Financial highlights

• Total income was Rs.703.92 crore vs Rs.721.87 crore; operating profit Rs.199.23 crore vs Rs.214.55 crore; net profit Rs.105.34 crore vs Rs.161.05 crore.

• Interest earned was Rs.590.77 crore vs Rs.647.62 crore; other income rose to Rs.113.15 crore from Rs.74.25 crore, including Rs.27.56 crore net gain on investment sales.

• Deposits grew to Rs.6,672.19 crore from Rs.5,911.47 crore; advances reached Rs.4,741.01 crore, up 15.60% YoY.

• Net profit included Rs.67.86 crore investment depreciation/amortization and a Rs.7 crore wage-revision provision; prior-year wage provision was Rs.8 crore.

Outlook and guidance

• FY06 targets: deposits of Rs.8,000 crore and advances of Rs.5,500 crore; plans included 15 new branches and 50 additional ATMs.

• Priorities included interconnecting remaining branches on CBS, internet/mobile banking, cheque truncation, wider RTGS access, low-cost deposits, insurance cross-selling and derivatives trading.

• Management cited a 7% projected domestic GDP growth rate for FY06, with agricultural growth forecast at 3.3% and average inflation at 5–5.5%, subject to oil-market uncertainty.