Though Karur Vyasa Bank is small in terms of market cap (just over Rs 2000 crore), it is one of the leading banks when it comes to financial strength and efficiency.
The bank primarily operates in South India, but has been expanding in other parts of the country as well. At the end of financial year 2009, the number of branches stood at 312. The bank has recently pointed out that it aims to increase the number to 350 by the end of current financial year. This reflects the pace at which the bank is expanding.
Karur Vyasa Bank is ranked amongst the top 10 banks in three to four parameters. The bank ranked 4th in terms of financial strength, 6th in efficiency and 7th in terms of shareholder's return.
The bank has been consistent in maintaining a Net Interest Margin (NIM) in excess of 3% in the last nine financial years. Only a few banks have been able to achieve this.. while the average ROA posted by Indian banks in FY 2009 was 1 percent, ROA for Karur Vyasa bank was 1.5 percent.
The bank also fares well in terms of quality of assets, the net non performing assets formed a meagre 0.25 percent of net advances at the end of FY 2009. here also, only three banks - Punjab National Bank, Andhra bank and Indian bank- performed better. There was a further improvement in the asset quality in FY 2010, as net NPA formed 0.22 percent of the net advances.
The bank's performance in the current fiscal has been impressive. It has been able to outpace the industry in terms of loan growth. Its loan book was up by 23.2% year-on-year at the end of Sept'09 compared to just 13% growth in the gross bank's credit in the same period.
The net interest income of the bank has grown by 28.6% y-o-y in the six months ending September 09. As the interest rate surged last year, there was a decrease in banks' spreads. Consequently most banks reported the same net interest income. Even then, Karur Vyasa bank reported a 29 percent in its net interest income. This shows the banks resilience in tough times.