The Karnataka Bank Limited — Investor Meet, 07-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Karnataka Bank reported total business turnover at INR 1,77,978 crore, up 10% YoY. The profit after tax (PAT) decreased to INR 283 crore from INR 331 crore in the same period last year, influenced by changes in accounting policies and accelerated provisioning. For the nine-month period, PAT stood at INR 1,020 crore, slightly down from INR 1,032 crore last year. Gross advances grew 11.6% YoY to INR 77,860 crore, reflecting a strategic shift towards retail, agriculture, and mid-market lending. However, net interest income (NII) declined by 4.2% YoY to INR 792.78 crore due to increasing funding costs.

**Future Outlook and Growth Drivers:** Management emphasized continued focus on retail lending and customer acquisition strategies to drive growth, aiming for a 12% increase in advances by FY25. There is strong commitment to enhancing technology and infrastructure to support this growth, along with plans to open additional branches.

**Order Book and Operational Updates:** The bank's operational strength is highlighted by the opening of two new retail asset centers and plans for more in Tier 2 locations, strengthening their retail footprint.

**Analyst Q&A Insights:** Analysts inquired about the performance of retail and corporate segments, with management affirming plans to balance loan quality with growth targets. Questions around credit cost and operational challenges were addressed, with management expressing optimism about improved performance in the coming quarters despite prevailing market pressures.

**Market or Regulatory Updates:** No significant regulatory changes were noted during the call, but management reassured that existing policies were being adhered to.

**Strategic Focus Areas:** The bank is dedicated to transitioning from bulk deposits to more granular retail deposits, aiming for sustainable growth in CASA while navigating current market dynamics.

**Investor Insight:** Overall, while the bank has faced some performance challenges, the strategic initiatives being implemented suggest potential for gradual improvement. Observing the bank's ongoing recovery mechanisms and growth strategies, there appears to be an opportunity to consider accumulating shares, given long-term growth potential.