Karnataka Bank Sees Asset Book Rising 13% In FY25 Despite Slowdown In Overall Credit Growth

Karnataka Bank Ltd. is on track to grow its asset book by 13% in fiscal 2025 despite the slowdown in overall credit growth being faced by the banking sector, according to Srikrishnan H., the lender's managing director and chief executive officer.

The Karnataka Bank CEO pointed out that the overall sectoral credit growth, which was upwards of 14-15% in the last financial year, has been projected at 11% in this fiscal. “That is a reflection of the overall economy and the overall credit growth that has been predicted,” he told NDTV Profit.

However, Karnataka Bank is on track to grow its asset book by 12% to 13% even in a scenario like this, he claimed.

“Given that background, we believe that because of our unique positioning in the balance sheet, our asset liability, etc, we will be in a position to grow the asset book even this year by about 12% to 13%,” the top executive said.

Srikrishnan noted that the bank was seeing a “granular” growth as far as deposits were concerned.

“As a result, we wanted to consciously give up a little bit of the low-yielding corporate loans, and so on,” he said. This approach has resulted in a change in the bank's lending strategy, he said.

“Now, we are replacing them with the high-yielding, retail, and the mid-corporate kind of assets. So, the asset book will grow in this fiscal year to the tune of about 13% or so, which is again ahead of the market,” he said.

In terms of deposits, Karnataka Bank will stick to its strategy of not chasing higher-cost bulk deposits, its MD said.

“We are a retail franchise, and we want to really, make sure that the RAM sector, which is the retail, agri, and the mid-market, is the big focus for us. That will contribute to almost two-thirds of our book and the business,” he noted.