Anand Rathi: Karnataka Bank’s Strong Quarter, Bracing For A Tough Year Ahead
Karnataka Bank. (Source: BloombergQuint)

Anand Rathi: Karnataka Bank’s Strong Quarter, Bracing For A Tough Year Ahead

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BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Anand Rathi Report

Higher treasury income and lower operating expenditure cost led to a 93% pre-provision operating profit jump for Karnataka Bank. Asset quality and provision coverage ratio of the lender also improved.

With half the bank’s portfolio under moratorium, Anand Rathi expects the asset quality to come under stress once it is lifted keeping FY21 earnings muted.

Given the weak economic environment and around 51% of the bank’s current book under moratorium -- the highest among regional banks --, the broking firm expects delinquencies to sharply increase once the moratorium is lifted.

Click on the attachment to read the full report:

Anand Rathi Karnataka Bank Company Update.pdf

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