Karur Vysya Bank expects 2 per cent more credit growth than industry in FY26

Chennai, May 25 (PTI) Private sector Karur Vysya Bank expects its credit growth to be more than 2 per cent over the industry's overall growth during the current financial year, a top official said.

The Tamil Nadu-based bank has lined up plans to open 28 new branches before the first half of the current financial year, particularly in Southern and Western parts of the country, the Bank's Managing Director and CEO, Ramesh Babu, said.

The financial landscape is witnessing a dramatic transformation globally as well as in India, driven by technological innovations, changing consumer preferences and the emergence of alternative business models, he said.

"The Reserve Bank of India is expected to adopt a more accommodative monetary policy stance. This could involve further rate cuts to stimulate domestic demand and support economic growth. The sudden escalation at the border has also added more uncertainties for the coming year," Babu told analysts recently, during the Q4 FY2025 Earnings Conference Call.

"Considering the above, the outlook for the Financial Year 2025-26 remains cautiously optimistic; we need to navigate margin pressures too and monitor asset quality closely. We expect our credit growth to be more than 2 per cent over the industry growth," he said.

On maintaining the Net Interest Margin in the current financial year, Babu said, it is expected to be in the range of 3.7 to 3.75 per cent for the full year.

Considering the branch expansion and additional manpower plan, he said the cost-to-income ratio would continue to be around 50 per cent in FY 2025-26.

"Our efforts on recoveries should continue, and we expect the momentum gained in the last year will be retained in the financial year 2025-26 too," he said.

On Gross Non-Performing Assets (GNPA) and Net NPA, he said, GNPA is expected to be less than 150 basis points and net NPA to be less than 1 per cent for the financial year.

"Slippages would be expected to be below 1 per cent of our asset book," he said.

The bank reported a 13 per cent growth in net profit to Rs 513 crore during the January-March 2025 quarter, from Rs 456 crore registered in the corresponding quarter of the last financial year.

The Board, which met on May 19 recommended a dividend of Rs 2.60 per equity share (130 per cent) for the financial year ending March 31, 2025.

Total income during the quarter under review grew to Rs 3,025 crore from Rs 2,813 crore registered in the corresponding quarter of last financial year, he said. PTI VIJ ADB