Karur Vysya Bank's profit climbs 12% in March 2025 quarter; stock up 2%

Karur Vysya Bank's (KVB's) standalone net profit for the fourth quarter (Q4 FY25) rose by 12.50% to ₹513 crore, up from ₹456 crore in the same quarter last year. Additionally, the Pre-Provision Operating Profit (PPOP) for the quarter saw an increase of 17.60%, reaching ₹835 crore, excluding a one-off item valued at ₹157 crore. The bank said this improvement underscores its operational efficiency and ability to generate higher profits.

Net interest income also rose by 9.11% to ₹1,089 crore, compared to ₹998 crore in the corresponding quarter last year. Although the net interest margin slightly declined to 4.05% from 4.20%, the overall performance remains strong, supported by an improved yield on advances of 10.21%, up by 11 basis points (bps).

The cost of deposits increased by 38 basis points to 5.74% compared to the previous year's quarter. Despite this, the bank managed to maintain a favourable cost-to-income ratio of 47.77% compared to 51.62% in the previous year, demonstrating effective cost management strategies.

KVB has demonstrated a robust financial performance for the year ending March 2025, with its Capital Adequacy Ratio (CRAR) at 18.17%, up from 16.67% the previous year. This is well above the mandatory regulatory requirement of 11.50%. The Tier 1 capital also increased to 17.12% from 15.46% a year ago, indicating strong capital support.

The bank said its risk-weighted assets grew to ₹66,261 crore, compared to ₹61,125 crore last year, reflecting a healthy balance sheet. The balance sheet size itself reached ₹1,19,367 crore, marking a 13.19% growth from the prior year. These figures highlight the bank's successful strategy in expanding its asset base while maintaining capital adequacy.

Ramesh Babu B, Managing Director & CEO, noted, "The bank has made the highest ever profit of Rs 1,942 crore for the year ended 31.3.2025 and the highest quarterly profit of Rs 513 crore for the fourth quarter continuing its strong performance, guided by our three key metrics: growth, profitability, and asset quality. Both advances and liabilities grew 14% each during the year. We have continued to maintain a strong trajectory of growth in RAM (Retail, Agriculture, and MSME) verticals throughout the year registering 20% growth. Our total business crossed ₹1,86,569 crore with deposits crossing 1 Trillion during the 4th quarter of the year."

KVB's total business reached ₹1,86,569 crore, with deposits surpassing ₹1 trillion, indicating a significant milestone achieved during the fourth quarter. This shows the bank's strong business model and its ability to attract substantial deposits, capitalising on its market position.

Meanwhile, shares of KVB were trading 1.73 per cent higher at Rs 229.35.