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