Karur Vysya Bank aims to reduce NPAs by March 2023

Karur Vysya Bank Limited (KVB) has chalked out plans to bring down its gross and net non-performing assets (NPAs) to below 3% and 1% respectively by March 23.

“Due to lower slippages, recoveries and technical write-off, gross NPAs have come down to 3.97% (during Q2/FY23). Our plan is to reduce it to below 3% level by March 2023,” said MD & CEO, B. Ramesh Babu during an earnings call.

Stating that the net NPA level was further reduced to 1.36%, he said it was the bank’s endeavor to bring it to below 1% level by March 2023.

During the second quarter, gross slippages were at ₹131 crore or about 1% of the loan book on an annualised basis and in line with the bank guidance. Besides, the bank reported negative net slippages of ₹74 crore. “This is the fifth quarter in succession, wherein we were able to maintain this trend of negative net slippages,” he said.

According to him, the bank technically wrote-off ₹576 crore for balance sheet management. “Recoveries from this segment are showing an uptick, and we hope to improve on this front during the remaining part of the year. There was no sale to Asset Reconstruction Companies during the quarter,” he said.

Mr. Babu reiterated that they continue to focus on low-cost deposits so as to offset the impact of recent hikes in term deposit rates and to keep the increase in funding costs at a minimum level.

The private sector lender always considered MSME as a core focus sector. In the past, loans up to ₹5 crore were managed in the branches.

“We are now in the process of creating emerging small business centres under small business group to exclusively focus on MSME business that is for less than ₹5 crore exposure,” he said.