Karur Vysya Bank has reported its highest-ever annual net profit and a significant improvement in asset quality for the year FY23.

The old private sector bank’s board has recommended a dividend of .₹2 per equity share of face value ₹2 each for the year ended March 31, 2023.

KVB has posted a 64 per cent increase in net profit at ₹1,106 crore for the year ended March 31, 2023(₹673 crore), buoyed by a strong increase in net interest income and other income amid higher provisions.

The operating profit of the bank stood at ₹2,476 crore in FY23 (₹1630 crore) .

Net interest income was higher by 23.3 per cent to ₹3,349 crore (₹2,716 crore), while net interest margin stood at 4.18 per cent, up by 46 bps from 3.72 per cent, according to a statement.

“We have performed consistently to deliver the highest-ever annual net profit of ₹1,106 crore for 2022-23. Credit cost has improved on the back of continued strong asset quality, with gross NPA and net NPA at 2.27 per cent and 0.74 per cent respectively,” said B Ramesh Babu, Managing Director & CEO, Karur Vysya Bank.

Provisions and contingencies were higher at ₹1,039 crore in FY23 (₹699 crore) .

Asset quality

However, gross NPA declined 2.27 per cent to ₹1,458 crore during the March 2023 quarter when compared with 6.03 per cent a year ago. GNPA stood at 2.7 per cent as of December 31, 2022. Net NPA also fell to 0.74 per cent in Q4 of FY23 as against 2.31 per cent a year ago and 0.90 per cent in December 2022 quarter. 

Provision coverage ratio (PCR) was at 92.14 per cent as of March 31, 2023(80.27 per cent).

Its total business stood at ₹1,40,806 crore (₹1,25,362 crore) , an increase of 12 per cent. The yield on advances grew to 8.93 per cent from 8.56 per cent.

“Broad-based business growth coupled with core revenue profile has yielded in higher ROA, currently at 1.27 per cent for the year and 1.50 per cent for the quarter,” said Babu.

For the quarter ended March 31, 2023, KVB’s net profit rose 59 per cent at ₹338 crore (Rs.213 crore). Operating profit was higher by 68 per cent at ₹739 crore (₹441 crore).

Net interest income improved by 26 per cent at ₹893 crore (₹710 crore), while non-interest income grew to ₹401 crore (₹205 crore).