Q2 2025 Karnataka Bank Ltd Earnings Call Transcript
Key Points
- Karnataka Bank Ltd (BOM:532652) reported a year-on-year growth of 12% in business turnover, reaching INR 1,75,284 crores.
- The bank's profit after tax for Q2 FY25 increased to INR 336.7 crores from INR 30.26 crores in the same quarter last year.
- Gross NPA improved significantly from 3.54% to 3.21%, showing progress towards the bank's target of reducing it closer to 3%.
- Retail advances grew by 12.2% year-on-year, driven by retail housing and gold loans.
- The bank's capital adequacy ratio (CRAR) stands comfortably at 17.48%, with potential to exceed 18.5% when including half-yearly profits.
- The bank's net interest margin (NIM) dipped to 3.38% for the half year, slightly below the guidance range of 3.4% to 3.6%.
- Cost-to-income ratio increased to 58% due to elevated one-time costs in technology and lateral recruitment.
- The bank's CASA ratio decreased compared to last year, reflecting industry-wide trends of funds moving away from CASA deposits.
- Advances growth guidance was revised down from 18% to 15% due to a strategic shift away from low-yield bulk PSU advances.
- Employee costs increased significantly due to actuarial valuations and lateral recruitments, impacting overall expenses.
Ladies and gentlemen, good day, and welcome to Q2 H1 FY25 earnings conference call hosted by Karnataka Bank. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Srikrishnan H, MD and CEO from Karnataka Bank. Thank you, and over to you, sir.
Thank you, Zel, and good evening, everyone. Warm welcome to our Q2 FY25 earnings call. On behalf of Karnataka Bank, I'm Srikrishnan, MD, CEO. I have with me here Sekhar Rao, Executive Director; Abhishek Bagchi, who is our CFO; Vinay Bhatt, who is our Chief Compliance Officer; and Ragan, who is our Chief Risk Officer. So that is that, we have a couple of other executives who work from the Investor Relationship team.
Greetings for the festive season and wish you all and your families a very happy Diwali in advance. The bank has ensured that we are fully prepared for to capitalize on the opportunities that are coming up due to the festive season during the second half of this year.
As I mentioned during the previous earnings
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