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Karnataka Bank Shares Gain As Q3 Profit More Than Doubles

Karnataka Bank's third-quarter net profit jumped 118.49% year-on-year to Rs 826.49 crore.

<div class="paragraphs"><p>Karnataka Bank branch. (Source: Bank website)</p></div>
Karnataka Bank branch. (Source: Bank website)

Shares of Karnataka Bank Ltd. gained the most in over five weeks since Dec. 26 after third-quarter profit more than doubled on improving operational efficiencies across businesses.

Karnataka Bank's third-quarter net profit jumped 118.49% year-on-year to Rs 826.49 crore, according to the exchange filing. The net interest income rose 34% year-on-year to Rs 834.76 crore.

The company's asset quality improved sequentially and annually, while deposits rose 7.86% annually to Rs 84,597 crore and net advances were up 12.51% year-on-year to Rs 62,532 crore.

The Managing Director and Chief Executive Officer of the bank, Mahabaleshwara M.S., reinstated the company's belief in managing the provision levels on the balance sheet as a growth driver for the future. The provision coverage ratio of the company rose to 80.21% as compared to 73.66% in the third quarter of the previous fiscal.

"Our pursuit for growth also drives our conservative approach to managing our balance sheet and provision levels, and our careful stance towards the expected deterioration in the global economy, and its potential fallout on the more robust Indian economy," he said.

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Karnataka Bank Q3 FY23

  • NII is up 34% at Rs 834.76 crore (YoY).

  • Net profit up 118.49% at Rs 826.49 crore (YoY).

  • GNPA at 3.28% vs. 3.36% (QoQ)

  • NNPA at 1.66% vs. 1.72% (QoQ)

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Shares of the bank gained 7.59% to Rs 148.75 apiece as of 9:54 a.m., while the benchmark Nifty 50 gained 0.13%. The total traded volume so far stood at 5.3 times its 30-day average. The relative strength index at 14 implies that the stock may be oversold.

The single analyst tracking the company maintains a 'buy' rating on the stock, according to Bloomberg data.