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This Article is From May 29, 2021

Karnataka Bank Q4 Review - Asset Quality Improvement A Key To Re-Rating: Centrum Broking

Karnataka Bank Q4 Review - Asset Quality Improvement A Key To Re-Rating: Centrum Broking

Karnataka Bank Q4 Review - Asset Quality Improvement A Key To Re-Rating: Centrum Broking
A Karnataka Bank branch. (Source: BloombergQuint).

BQ Blue's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BloombergQuint's subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Centurm Broking Report

Karnataka Bank Ltd. saw a mixed Q4 FY21. Net interest income underperformed led by interest reversals resulting in net interest margin compression QoQ.

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Loan growth saw a 9.3% decline YoY led by a sharp 53.4% contraction in corporate while retail/mid-corporate saw 6-7% growth.

The bank has significantly de-risked the portfolio with the retail/mid-corporate share improving from 74% in FY20 to 87% in FY21 which resulted in net interest income uptick of 16 basis points YoY to 2.9%.

Shift in loan mix has also led to freeing up of capital with common equity tier-1 enhancing from 10.7% in FY20 to 12.3% in FY21.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

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