Karur Vysya Bank announces bonus issue after 7 years; Q1 net profit rises 14%

Karur Vysya Bank on Thursday declared a bonus issue in the ratio of 1:5, marking its first such announcement in nearly seven years. "Issuance of Bonus equity shares in the proportion of 1:5 i.e. 1 (one) equity share of face value Rs 2/- each for every 5 (five) fully paid-up equity share of Rs 2/- each held by the members of the Bank as on the Record Date, subject to the approval of the members of the Bank at the ensuing AGM and other statutory and regulatory approvals, if any," the private lender said in its exchange filing.

Once approved, this would mark the fourth bonus issue in Karur Vysya's history. The bank last announced a bonus in August 2018 in a 1:10 ratio. Before that, it issued bonus shares in a 2:5 ratio in September 2010, while its first-ever bonus was declared in October 2002 in a 1:1 ratio.

Eligible shareholders will receive one bonus share for every five shares held, with August 26 set as the record date to determine eligibility.

While a bonus issue increases the number of outstanding shares, it does not impact the company's market capitalisation (m-cap). However, it improves stock liquidity and makes shares more affordable, potentially boosting investor interest and upside momentum.

On the earnings front, the private sector bank posted a 14 per cent year-on-year (YoY) rise in net profit to Rs 521.45 crore for Q1 FY26. Net interest income grew 5 per cent YoY to Rs 1,079 crore.

Asset quality showed strong improvement, with net non-performing assets (NPA) dropping over 42 per cent YoY to Rs 170 crore. The net NPA ratio fell to 0.19 per cent.

The bonus issue and Q1 earnings were announced after market hours today. Earlier in the day, shares of Karur Vysya inched up 0.18 per cent to close at Rs 271.50.