Karnataka Bank slips 3% on weak Q4 margins; Rs 5.50 dividend announced

The bank's net interest income (NII), which is the difference between interest earned and interest expended, fell 3 per cent to Rs 834 crore in Q4FY24, from Rs 860 crore in Q4FY23

Karnataka Bank share falls: Shares of private lender Karnataka Bank slipped as much as 3.47 per cent to hit an intraday low of Rs 213.60 per share on Monday.

The fall came on the back of weak March quarter (Q4Y24) performance. Karnataka Bank’s standalone profit fell 22.5 per cent on a year-on-year (Y-o-Y) basis to Rs 274.2 crore in the March quarter of financial year 2024 (Q4FY24), from Rs 353.8 crore in the same quarter a year ago (Q4FY23).

The bank’s net interest income (NII), which is the difference between interest earned and interest expended, fell 3 per cent to Rs 834 crore in the fourth quarter of financial year 2024, from Rs 860 crore in the fourth quarter of financial year 2023.

In terms of asset quality, Karnataka Bank’s net non performing assets deteriorated to 1.58 per cent in Q4FY24, as opposed to 1.55 per cent in the previous quarter of FY24 (Q3Y24). Its net non performing assets stood at 3.53 per cent, as opposed to 3.64 per cent in the previous quarter of FY24.
 

The lender’s net interest margin (NIM) slipped to 3.30 per cent in Q4FY24, from 3.87 per cent in Q4FY23. NIM stood at 3.46 per cent in Q3FY24.

Karnataka Bank’s provisions fell over 27 per cent to Rs 184.7 crore in Q4FY24, from Rs 253.3 crore in Q4FY23. However, provisions improved nearly 30 per cent sequentially, from Rs 144.4 crore in Q3FY23.

Brokerage firm Anand Rathi said, “The weak Q4 operating performance stemmed from Karnataka Bank’s lower NIM and higher opex, as also seen in Q3. However, lower provisions and taxes aided profitability, with return on assets (RoA) at 0.96 per cent (down 25bps). Asset quality remained under pressure.”

The Board has recommended a dividend of Rs 5.50 per equity share for the financial year ended March 31, 2024, subject to the approval of the shareholders at the ensuing Annual General Meeting of the Bank. 

“The Record Date for consideration of eligibility of the shareholders for payment of dividend will be intimated in due course,” said Karnataka Bank.

At 1:47 PM, Karnataka Bank shares were trading a little over 2 per cent lower at Rs 216.75 per share. By comparison, S&P BSE Sensex was up 0.62 per cent at 75,879.49 levels.