Unaudited Financial Results for the Quarter / Half Year Ended 30th September 2020

(Rs. In Lakh)
Particulars Quarter ended Half Year ended Year ended
30-09-2020 30-06-2020 30-09-2019 30-09-2020 30-09-2019 31-03-2020
Unaudited Unaudited Audited
1. Interest earned (a+b+c+d) 139470 137610 153751 277080 303004 598998
a) Interest / discount on advances / bills 114030 111211 119324 225241 236874 466505
b) Income on Investments 24619 24135 30021 48754 58234 114967
c) Interest on balances with Reserve Bank of India & other interbank funds 653 2088 4163 2741 7409 14076
d) Other Interest 168 176 243 344 487 3450
2. Other income (Refer note 4 below) 27156 31713 27773 58869 54757 115462
3. Total Income (1+2) 166626 169323 181524 335949 357761 714460
4. Interest Expended 79321 81426 94123 160747 184979 364204
5. Operating Expenses (i+ii) 42429 40509 44285 82938 85153 174171
(i) Employees cost 22055 21364 21299 43419 41674 85665
(ii) Other operating expenses 20374 19145 22986 39519 43479 88506
6. Total Expenditure (excluding provisions and contingencies) (4+5) 121750 121935 138408 243685 270132 538375
7. Operating Profit before Provisions and Contingencies (3-6) 44876 47388 43116 92264 87629 176085
8. Provisions (other than tax) and Contingencies 28473 33757 36517 62230 69514 148867
9. Exceptional items - - - - - -
10. Profit from ordinary activity before tax (7-8-9) 16403 13631 6599 30034 18115 27218
11. Tax expense 4914 3081 266 7995 4490 3716
12. Net Profit from ordinary activities after tax(10-11) 11489 10550 6333 22039 13625 23502
13. Extraordinary items (net of tax expense) - - - - - -
14. Net Profit for the period (12-13) 11489 10550 6333 22039 13625 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 (%) 18.41 18.14 15.99 18.41 15.99 17.17
(iii) Earnings per share (EPS) (*) (Rs..)
a) Basic EPS before and after extraordinary items 1.44 1.32 0.79 2.76 1.70 2.94
b) Diluted EPS before and after extraordinary items 1.44 1.32 0.79 2.76 1.70 2.94
(iv) NPA Ratios
a) Gross NPA 399843 405566 439103 399843 439103 421277
b) Net NPA 142820 158523 211835 142820 211835 180865
c) % of Gross NPA 7.93 8.34 8.89 7.93 8.89 8.68
d) % of Net NPA 2.99 3.44 4.50 2.99 4.50 3.92
(v) Return on Asset (annualized) (%) 0.63 0.59 0.34 0.61 0.37 0.32
* EPS not annualised for the quarter/half year.
(Rs. In Lakh)
Segment Reporting for the Quarter / Half year ended 30th September 2020
Business Segments Quarter ended Half Year ended Year ended
30-09-2020 30-06-2020 30-09-2019 30-09-2020 30-09-2019 31-03-2020
Unaudited Unaudited Audited
Segment Revenue
1. Treasury 38098 44546 44326 82644 83429 166896
2. Corporate / Wholesale Banking 30970 31426 37798 62396 76173 150547
3. Retail Banking 96847 92980 98694 189827 196827 393881
4. Other Banking Operations 711 371 706 1082 1332 3136
Total 166626 169323 181524 335949 357761 714460
Segment Results
1. Treasury 14344 19815 15224 34159 29286 57825
2. Corporate / Wholesale Banking 8254 7991 9176 16245 19470 39259
3. Retail Banking 27183 24785 24673 51968 50617 102577
4. Other Banking Operations 555 291 621 846 1176 2760
Total 50336 52882 49694 103218 100549 202421
Less: Unallocated expenses (net) 5460 5494 6578 10954 12920 26336
Operating Profit 44876 47388 43116 92264 87629 176085
Tax expense 4914 3081 266 7995 4490 3716
Other Provisions 28473 33757 36517 62230 69514 148867
Net Profit from ordinary activities 11489 10550 6333 22039 13625 23502
Extraordinary items - - - - - -
Net Profit 11489 10550 6333 22039 13625 23502
Segment Assets
1. Treasury 1862604 1855302 2031770 1862604 2031770 1738669
2. Corporate / Wholesale Banking 1149529 1136483 1266351 1149529 1266351 1213077
3. Retail Banking 3632652 3476616 3443830 3632652 3443830 3396734
4. Other Banking Operations - - - - - -
5. Unallocated 472687 469631 599480 472687 599480 479337
Total Segment Assets 7117472 6938032 7341431 7117472 7341431 6827817
Segment Liabilities
1. Treasury 1710762 1695202 2009300 1710762 2009300 1607550
2. Corporate / Wholesale Banking 1033496 1022297 1116766 1033496 1116766 1087141
3. Retail Banking 3266230 3127431 3036956 3266230 3036956 3043627
4. Other Banking Operations - - - - - -
5. Unallocated 424917 422525 528279 424917 528279 429472
Total (a) 6435405 6267455 6691301 6435405 6691301 6167790
Capital Employed (Segment Assets - Segment Liabilities)
1. Treasury 151842 160100 22470 151842 22470 131119
2. Corporate / Wholesale Banking 116033 114186 149585 116033 149585 125936
3. Retail Banking 366422 349185 406874 366422 406874 353107
4. Other Banking Operations - - - - - -
5. Unallocated 47770 47106 71201 47770 71201 49865
Total (b) 682067 670577 650130 682067 650130 660027
Total Segment Liabilities (a+b) 7117472 6938032 7341431 7117472 7341431 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.
(Rs. In Lakh)
Statement of Assets and Liabilities as on 30th September 2020
Particulars As on
30-09-2020 30-09-2019 31-03-2020
Unaudited Audited
Capital and liabilities
Capital 15986 15986 15986
Reserves and surplus 666081 634144 644041
Deposits 6112241 6221279 5907508
Borrowings 138269 305269 118418
Other liabilities and provisions 184895 164753 141864
Total 7117472 7341431 6827817
Assets 
Cash and balances with Reserve Bank of India 257311 348656 273267
Balances with banks and money at call and short notice 22121 193441 165988
Investments 1843464 1839835 1576244
Advances 4782181 4710181 4609811
Fixed assets 55635 61276 58664
Other assets 156760 188042 143843
Total 7117472 7341431 6827817
(Rs. In Lakh)
Cash Flow Statement for the Half year ended 30th September 2020
Particulars Half Year ended Year ended
30-09-2020 30-09-2019 31-03-2020
Unaudited Audited
Cash flow from / (used in) operating activities
Net profit as per Profit and Loss account 22039 13625 23502
Adjustments for
Depreciation on Bank’s property 6171 5509 11888
Interest paid on TIER II bonds 2918 3635 6537
Provisions for other contingencies 20046 (424) 5247
Provision for taxes 7995 4490 3716
Provision for depreciation on investment 10221 1115 4022
Provision for standard assets 755 910 370
Provision for bad and doubtful debts 32869 65264 135617
Provision for non performing investments (1662) 2650 3610
Provision for leave encashment 789 1460 1011
Amortization of premium paid on Held to Maturity (HTM) investments 5828 2872 6708
Provision for employees stock option plan / scheme - - 20
(Profit) / loss on sale of fixed assets (net) - 670 1246
Operating profit before working capital changes 107969 101776 203494
Adjustments for working capital changes
(Increase) / Decrease in investments (excluding HTM investments) (167214) (217425) 37537
(Increase) / Decrease in advances (205215) 82230 112224
(Increase) / Decrease in other assets (15564) (24659) 18294
Increase / (Decrease) in deposits 204733 234484 (79287)
Increase / (Decrease) in borrowings 19852 148735 (23116)
Increase / (Decrease) in other liabilities and provisions 23751 16091 (6651)
(31688) 341232 262495
Direct taxes paid (7617) (9336) (12113)
Net cash flow from / (used in) operating activities (39305) 331896 250382
Cash flow from investing activities
Purchase of fixed assets (3142) (8487) (12253)
(Increase) / Decrease in HTM investments (114393) (140888) (139963)
Sale of fixed assets / other assets - (670) (1246)
Net cash flow from / (used in) investing activities (117535) (150045) (153462)
Cash flow from financing activities
Proceeds from share premium - 6 6
Increase / (Decrease) in TIER II bonds - - (15000)
Interest paid on TIER II bonds (2918) (3635) (6537)
Dividend paid (including tax on dividend) (65) (5830) (5839)
Net cash from / (used in) financing activities (2983) (9459) (27370)
Net Increase / (Decrease) in cash & cash equivalents (159823) 172392 69550
Cash and cash equivalents at the beginning of the year 439255 369705 369705
Cash and cash equivalents at the end of the period / year 279432 542097 439255
The above Cash Flow Statement is based on indirect method.

Notes:

1) The above financial results for the quarter/half year ended 30th September 2020 have been reviewed by the Audit Committee of the Board and approved by the Board of Directors at the meeting held on 30th October 2020. 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 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/half year ended 30th September 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 Reserve Bank of India 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, 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) The outbreak of 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 to mitigate the impact as well as regulatory measures notified by RBI. 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. The moratorium period / benefits, wherever granted, were excluded for the purpose of asset classification as per Income Recognition, Asset Classification and Provisioning (IRAC) norms during the moratorium period.

Bank is required to make additional provision @ 10%, over two quarters beginning with the quarter ended 31st March 2020, in respect of such borrowers whose accounts, though classified as Standard, would have become non-performing but for these benefits / relaxations. Accordingly, the aggregate provision held for the likely impact of COVID-19 was Rs. 120.01 crore as on 30th June 2020, which was higher than the requirement as per RBI guidelines dated 17th April 2020. Further, as a matter of prudence, the Bank has made an additional provision of Rs. 95.28 crore during the current quarter and the aggregate provision against the likely impact of COVID-19 stands at Rs. 215.29 crore as on 30th  September 2020, inclusive of RBI mandated provision.

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. However, as a matter of prudence, an additional provision of Rs. 4.72 crore has been created in respect of such accounts for the quarter ended 30th September 2020.

Disclosure as per RBI circular DOR.No.BP.BC.63/21.04.048/2019-20 dated 17th April 2020

Particulars Rs. in lakh
1. Outstanding amount as on 31st March 2020 in SMA/overdue categories where the moratorium/deferment was extended 289646
2. Respective amount where asset classification benefits is extended (balance as on 30th September 2020)* 46262
3. Provisions made during the quarter ended 31st March 2020 and 30th June 2020^ 12001
4. Provisions adjusted during the quarter / half year ended 30th September 2020 against slippages -

(*) Out of these accounts, balances in SMA-0 is Rs. 16406 Lakh, SMA-1 is Rs. 13293 Lakh and SMA-2 is Rs. 16563 Lakh.

(^) As a matter of prudence, Bank holds additional provision over and above the RBI mandated provision.

7) Disclosures as per RBI circular DOR.No.BP.BC.72/21.04.048/2019-20 dated 23rd May 2020 and DOR.No.BP.BC.62/21.04.048/2019-20 dated 17th April 2020 in respect of accounts where the resolution period was extended for the half year ended 30th September 2020

No. of accounts in which resolution period was extended 2
Amount involved (Rs. in lakh) 12486

8) Pursuant to the Memorandum of Understanding dated 22nd July 2020 entered into between Indian Banks’ Association and Workmen Unions and Officers’ Associations, Bank has assessed the impact of proposed wage revision and has created an additional provision of Rs. 23.55 crore during the current half year (no provision was created during the corresponding period of previous year), pending finalization of bipartite settlement.

9) Provision Coverage Ratio as on 30th September 2020, calculated as per the guidelines of Reserve Bank of India, is 75.19% (previous period 61.82%).

10) 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: 30th October 2020

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