Unaudited Financial Results for the Quarter / Nine Months Ended 31st December 2020

(Rs. In Lakh)
Particulars Quarter ended Nine months ended Year ended
31-12-2020 30-09-2020 31-12-2019 31-12-2020 31-12-2019 31-03-2020
Unaudited Unaudited Audited
1. Interest earned (a+b+c+d) 135031 139470 150378 412111 453382 598998
a) Interest / discount on advances / bills 110465 114030 115236 335706 352110 466505
b) Income on Investments 23455 24619 29181 72209 87415 114967
c) Interest on balances with Reserve Bank of India & other interbank funds 843 653 3732 3584 11141 14076
d) Other Interest 268 168 2229 612 2716 3450
2. Other income (Refer note 4 below) 25149 27156 26006 84018 80763 115462
3. Total Income (1+2) 160180 166626 176384 496129 534145 714460
4. Interest Expended 76673 79321 92657 237420 277636 364204
5. Operating Expenses (i+ii) 57816 42429 45254 140754 130407 174171
(i) Employees cost 36828 22055 22549 80247 64223 85665
(ii) Other operating expenses 20988 20374 22705 60507 66184 88506
6. Total Expenditure (excluding provisions and contingencies) (4+5) 134489 121750 137911 378174 408043 538375
7. Operating Profit before Provisions and Contingencies (3-6) 25691 44876 38473 117955 126102 176085
8. Provisions (other than tax) and Contingencies 20121 28473 36426 82351 105940 148867
9. Exceptional items - - - - - -
10. Profit from ordinary activity before tax (7-8-9) 5570 16403 2047 35604 20162 27218
11. Tax expense 2107 4914 540 10102 5030 3716
12. Net Profit from ordinary activities after tax(10-11) 3463 11489 1507 25502 15132 23502
13. Extraordinary items (net of tax expense) - - - - - -
14. Net Profit for the period (12-13) 3463 11489 1507 25502 15132 23502
15. Paid-up equity share capital (FV Rs.2/- per share) 15986 15986 15986 15986 15986 15986
16. Reserves excluding Revaluation Reserve 644041
17. Analytical Ratios
(i) % of shares held by Government of India - - - - - -
(ii) Capital Adequacy Ratio-Basel III (%) 18.52 18.41 15.87 18.52 15.87 17.17
(iii) Earnings per share (EPS) (*) (Rs..)
a) Basic EPS before and after extraordinary items 0.43 1.44 0.19 3.19 1.89 2.94
b) Diluted EPS before and after extraordinary items 0.43 1.44 0.19 3.19 1.89 2.94
(iv) NPA Ratios
a) Gross NPA 384247 399843 442397 384247 442397 421277
b) Net NPA 126311 142820 194568 126311 194568 180865
c) % of Gross NPA 7.37 7.93 8.92 7.37 8.92 8.68
d) % of Net NPA 2.55 2.99 4.13 2.55 4.13 3.92
(v) Return on Asset (annualized) (%) 0.19 0.63 0.08 0.47 0.27 0.32
* EPS not annualised for the quarter/nine months.
(Rs. In Lakh)
SEGMENT REPORTING FOR THE QUARTER/NINE MONTHS ENDED 31st DECEMBER 2020
Business Segments Quarter ended Nine months ended Year ended
31-12-2020 30-09-2020 31-12-2019 31-12-2020 31-12-2019 31-03-2020
Unaudited Unaudited Audited
Segment Revenue
1. Treasury 30614 38098 38284 113258 121713 166896
2. Corporate / Wholesale Banking 31168 30970 37270 93564 113443 150547
3. Retail Banking 97654 96847 100010 287481 296837 393881
4. Other Banking Operations 744 711 820 1826 2152 3136
Total 160180 166626 176384 496129 534145 714460
Segment Results
1. Treasury 8561 14344 9472 42720 38758 57825
2. Corporate / Wholesale Banking 4821 8254 9437 21066 28907 39259
3. Retail Banking 17215 27183 25785 69183 76402 102577
4. Other Banking Operations 516 555 717 1362 1893 2760
Total 31113 50336 45411 134331 145960 202421
Less: Unallocated expenses (net) 5422 5460 6938 16376 19858 26336
Operating Profit 25691 44876 38473 117955 126102 176085
Tax expense 2107 4914 540 10102 5030 3716
Other Provisions 20121 28473 36426 82351 105940 148867
Net Profit from ordinary activities 3463 11489 1507 25502 15132 23502
Extraordinary items - - - - - -
Net Profit 3463 11489 1507 25502 15132 23502
Segment Assets
1. Treasury 1837265 1862604 1978272 1837265 1978272 1738669
2. Corporate / Wholesale Banking 1203033 1149529 1245554 1203033 1245554 1213077
3. Retail Banking 3748212 3632652 3466386 3748212 3466386 3396734
4. Other Banking Operations - - - - - -
5. Unallocated 471255 472687 575271 471255 575271 479337
Total Segment Assets 7259765 7117472 7265483 7259765 7265483 6827817
Segment Liabilities
1. Treasury 1676339 1710762 1896941 1676339 1896941 1607550
2. Corporate / Wholesale Banking 1086600 1033496 1111004 1086600 1111004 1087141
3. Retail Banking 3385706 3266230 3092531 3385706 3092531 3043627
4. Other Banking Operations - - - - - -
5. Unallocated 425590 424917 513369 425590 513369 429472
Total (a) 6574235 6435405 6613845 6574235 6613845 6167790
Capital employed (Segment assets - Segment liabilities)
1. Treasury 160926 151842 81331 160926 81331 131119
2. Corporate / Wholesale Banking 116433 116033 134550 116433 134550 125936
3. Retail Banking 362506 366422 373855 362506 373855 353107
4. Other Banking Operations - - - - - -
5. Unallocated 45665 47770 61902 45665 61902 49865
Total (b) 685530 682067 651638 685530 651638 660027
Total Segment Liabilities (a+b) 7259765 7117472 7265483 7259765 7265483 6827817
For the above segment reporting, the reportable segments are identified into Treasury, Corporate/Wholesale banking, Retail banking and other banking operations in compliance with RBI guidelines. The Bank operates only in India.

Notes:

1) The above financial results for the quarter/nine months ended 31st December 2020 have been reviewed by the Audit Committee of the Board and approved by the Board of Directors at the meeting held on 11th February 2021. The same have been subjected to limited review by the Statutory Central Auditors of the Bank in line with the guidelines issued by the Reserve Bank of India (RBI) and as per the listing agreement with the stock exchange.

2) There has been no change in the accounting policies followed in the preparation of these financial results for the quarter/nine months ended 31st December 2020 as compared to those followed in the financial statements for the year ended 31st March 2020.

3) The Bank has made provisions in accordance with RBI guidelines, for loan losses and depreciation on investments, standard advances, restructured advances, exposures to entities with unhedged foreign currency exposure. Provision for employees’ retirement benefits viz. pension, gratuity and leave encashment has been made based on actuarial valuation. Provision for Income Tax, Deferred Tax and other contingencies are made on an estimated and proportionate basis and are subject to adjustments, if any, at the year end.

4) Other income includes fees earned from providing services to customers, commission from non-fund based banking activities, earnings from foreign exchange transactions, selling third party products, profit on sale of investments (net), recoveries from advances written off, profit on bullion business etc.

5) In accordance with RBI circular DBOD.No.BP.BC.1/21.06.201/2015-16 dated 1st July 2015, read together with RBI circular DBR.No.BP.BC.80/21.06.201/2014-15 dated 31st March, 2015, Banks are required to make Pillar 3 disclosures under Basel III capital regulations. Accordingly, the Pillar 3 disclosures under Basel III capital regulations have been made available on the Bank’s website at the following link https://www.kvb.co.in/about-us/disclosures/disclosures-pillar-III/. These disclosures have not been subjected to review / audit by the Statutory Central Auditors.

6) COVID-19 pandemic continues to have a significant impact and volatility in the global and domestic economies and consequently the extent to which the same will impact the Bank’s operations and financial position remain uncertain and is dependent on several factors including, inter-alia, measures initiated by the Government of India and RBI to mitigate the effects of the pandemic. There is improvement in economic activity consequent to the relaxations of restrictions by Government. The Bank’s management continues to closely monitor the day-to-day operations, business and liquidity position as well as adequacy of capital.

RBI vide circular DOR.No.BP.BC.72/21.04.048/2019-20 dated 23rd May 2020 read with circulars DOR.No.BP.BC.63/21.04.048/2019-20 dated 17th April 2020 and DOR.No.BP.BC.47/21.04.048/2019-20 dated 27th March 2020 announced ‘COVID-19 Regulatory Package’ which envisaged grant of various relief measures to borrowers whose accounts were classified as Standard Assets as on 29th February 2020. Accordingly, Board approved a policy for implementation of the said package including, inter-alia, grant of moratorium on the payment of installments and/or deferment of interest falling due between 1st March 2020 and 31st August 2020 as well as relaxation of certain other parameters, to eligible borrowers.

As on 30th September 2020, Bank was maintaining provision against the likely impact of COVID-19 amounting to Rs. 21529 lakh. Out of this, during the current quarter, the bank has utilized Rs. 1404 lakh for creation of RBI mandated provision for advances restructured under “Resolution framework for COVID-19 related stress” and Rs. 6456 lakh for provision in respect of accounts which have not been classified as NPA pursuant to interim order of Honourable Supreme Court.

The Honourable Supreme Court of India in a writ petition in the matter of Gajendra Sharma Vs. Union of India & Anr. vide its interim order dated 3rd September 2020, has directed Banks that the accounts which were not declared NPA till 31st August 2020 shall not be classified as NPA till further orders. Pursuant to the order, the Bank has not classified any account that was not classified as NPA as on 31st August 2020 as per the prudential IRAC norms of RBI, as NPA after 31st August 2020. During the current quarter, the Bank has made additional provision of Rs. 6525 lakh (Rs. 472 lakh for the quarter ended 30th September 2020) for certain accounts which otherwise would have become NPA had there been no Supreme Court order directing banks not to classify any account as NPA and Rs. 5732 lakh has been provided for certain accounts for which resolution framework have been invoked.

However, if the Bank had classified borrower accounts as NPA after 31st August 2020, the Bank’s pro forma Gross NPA ratio and pro forma Net NPA ratio would have been 9.07% and 4.08% respectively as at 31st December 2020. The Bank has also not recognized the unrealized interest on these accounts and not considered these accounts as NPA for computation of capital adequacy ratio as at 31st December 2020.

The aggregate of the above provisions including provision for likely impact of COVID-19 and RBI mandated provision as on 31st December 2020 is Rs. 34258 lakh and provisions held by the Bank against the potential impact of COVID-19 are in excess of the RBI prescribed norms.

7) Hitherto, the Bank was making payment for proposed wage revision based on certain estimates. Pursuant to the 11th Bipartite Settlement and Joint Note dated 11th November 2020 entered into between Indian Banks’ Association and Workmen Unions and Officers’ Associations respectively, Bank has assessed the impact of wage revision and has created an additional provision of Rs. 17464 lakh during the quarter ended 31st December 2020 and Rs. 2355 lakh for the half year ended 30th September 2020.

8) Provision Coverage Ratio as on 31st December 2020, calculated as per the guidelines of RBI is 77.35% (previous period 65.43%).

9) Previous period’s/year’s figures have been re-classified/regrouped wherever considered necessary to confirm to the current period’s/year’s classification.

For and on behalf of Board of Directors

B. Ramesh Babu
Managing Director & CEO

Place: Karur
Date: 11th February 2021

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