Deep Dive Into Understanding Karur Vysya Bank’s Business Transformation Journey: Nirmal Bang

Nirmal Bang Report

We interacted with the management of Karur Vysya Bank Ltd. in order to understand its business transformation journey, which started in 2018 through digitalisation of its processes, asset quality clean-up and verticalization strategy, the impact of which is visible on its financial metrics.

The setting up of LOS across its retail, small and medium enterprise and corporate verticals five years back led to improved special mention account numbers and more time for branch staff for getting more leads.

From traditionally a corporate/SME focused bank, Karur Vysya Bank is now transforming into a multi-distribution channel led SME/retail focused bank.

Besides success of its DST channel NEO and collaboration with BCs and DSAs, the bank also has co-lending tie-ups with Cholamandalam for construction equipment loans, IIFL Finance for Gold Loans, Amazon (Axio) for BNPL and other tie-ups with fintechs.

Karur Vysya Bank has created separate verticals for stressed asset monitoring, small business group, business banking group and deposit mobilisation. It has worked on granularising its corporate portfolio, focusing on ticket sizes of below Rs 1 billion.

The bank has maintained its net interest margin guidance for Q4 FY24 at 3.8% and thereafter it is expected to remain at its historic long-term range of 3.75-3.8%. Its return on asset guidance for FY24 is 1.6% after considering double-digit loan growth, healthy margins and benign credit costs.

In the long term, it expects RoA to be ~1.5%. Karur Vysya Bank is trading at 1.5 times its trailing adjusted book value of Rs 110.10.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit 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 NDTV Profit.

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