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Axis Securities Report
The Karnataka Bank Ltd.'s advances grew 12.7%/4% YoY/QoQ to Rs 62,532 crore. Aided by strong growth in advances and a higher yield on loan books, net interest income grew by 34/4% YoY/QoQ to Rs 835 crore.
Consequently, Karnataka Bank's net interest margin improved by 65 basis points YoY but was flat sequentially. Non-interest income reported a subdued growth of 4% YoY and declined by 21% QoQ. This was due to a change in the provision of security receipts resulting in a one-time deduction from other income of 94 crore.
Opex inched up 9.6/4.6% YoY/QoQ. The cost/income ratio improved to 48.8% versus 56.5% YoY but increased sequentially. Thus, Karnataka Bank's robust NIM and strong operating performance resulted in profit aftar tax growth of 105% YoY. However, it reported a profit after tax decline of 27% QoQ due to an increase in provisions.
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