Shares of Karnataka Bank were trading 4.89 percent down at Rs 129.40 in morning trade on April 3 after the private sector lender reported lacklustre provisional numbers for the March quarter.
The bank’s gross advances grew 6.16 percent to Rs 61,326.42 crore in the three months to March 2023, compared to Rs 57,769.34 crore in the year-ago period, it said in a regulatory filing on April 1.
The low-cost current and savings account (CASA) deposits rose 8.71 percent to Rs 28,807.04 crore as against Rs 26,499.59 crore in the corresponding quarter of the previous fiscal.
Similarly, aggregate deposits climbed 8.69 percent to Rs 87,362.56 crore from Rs 80,380.81 crore in Q4 FY22 and Rs 84,592.65 crore in the quarter ended December 31, 2022.
The share of CASA to total deposits stood at 32.97 percent, the same as in the year-ago period and marginally higher from 31.91 percent in the quarter ended December 2022.
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With a decline of around 16 percent YTD, Karnataka Bank stock has underperformed the Bank Nifty (down 5.5 percent) but on a 1-year basis, the stock has soared 111 percent.
The Mangaluru-headquartered lender more than doubled its net profit to Rs 300.68 crore in Q3 FY23 as against Rs 146.57 crore in the year-ago period.
The operating profit went up 49.27 percent while net interest income surged 34.07 percent.
In a recent report, Axis Securities assigned a "buy" rating to Karnataka Bank on the back of its loan growth momentum and improving asset quality.
“The bank’s GNPA and NNPA improved meaningfully from the levels a couple of quarters back, and with the slippage ratio expected to moderate going forward, we believe the bank’s asset quality to continue improving going forward,” the report said, referring to gross non-performing assets and net non-performing assets.
It has a target price of Rs 170 for the stock.
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