analysis of financial results march 2019 · 1997-2002 implementation of “finacle” cbs in 2000...

Analysis of Financial Results

March 2019

Table of contents

3

4

Company Overview

2

1

Financial Performance

Annexure

Business Strategy

Company Overview

Time tested Bank with over 95 years of banking history .

Pan-India footprint.

Robust technology and risk management systems.

Strong productivity, capital adequacy ratios.

Experienced management team & Professional Board.

Highest Standards of Corporate Governance.

Powered by KBL – VIKAAS for Total Transformation.

Consistent track record of profit since inception.

01

02

03

04

05

06

07

08

1924

1960-66

Incorporated on 18th February 1924 at Mangalore by Late B R Vyasarayachar & other leading members of the South Kanara Region

Took over Sringeri Sharada Bank Ltd, Chitaldurg Bank & Bank of Karnataka, Hubli.

Public issue of 45 lakh equity shares in October 1995 Became an authorised dealer of foreign exchange in 1977

1977-96

1997-2002 Implementation of “Finacle” CBS in 2000

2002-06

2007-11

2012-16

2017-19

Floated general insurance JV along with Allahabad Bank, Indian Overseas Bank, Dabur Investments and Sompo Japan Insurance. Launched CDSL-DP services at select branches . Rights issue in the ratio of 2:1 to raise ` 160 crs. Right issue in the ratio of 1:2. Bancassurance tie-up with MetLife. Maiden bonus issue in the ratio of 1:1

Right issue of ` 457.03 crore in the ratio of 2:5. Launched Online Trading facility. Maiden QIP aggregate ` 160.83 crs. Completion of 100% core banking

Completed 1:2 rights issue to raise ` 658.96 crs. Unveiled KBL – VISION 2020 & adopted Vision Statement. No. of branches crossed 500 & No. of ATMs crossed 1,000. Business turnover crossed the milestone of ` 75,000 crore. Secured ISO 27001 : 2005 Certificate from NQA.. Launched ASBA facility

Customer base crossed the milestone of 1 crore. Business turnover crossed the historic milestone of ` 1,00,000 crore. Formed Investor Relation Cell. Networth of the Bank crossed ` 5,000 crs.

History

• Business Turnover of ` 1,23,280 crore

as on 31.03.2019.

• Networth of ` 5,785 crore as on

31.03.2019.

• 2,047 service outlets with 836 branches,

1 Extension Counter and 1,210 ATMs

(incl. 330 recyclers) in 542 centres

across India as on 31.03.2019.

• Offers wide variety of corporate and

retail banking products and services to

over 10.3 million customers.

• Incorporated in 1924, one of the oldest

time tested private sector Banks.

Evolution

Offers wide variety of banking products

With ` 1,23,280 Cr

business turnover

Oldest Bank

2,047 Outlets all over India

Pan-India footprint

Add Skills – 70%

Add Skills – 80%

Add Skills – 60%

Add Skills – 90%

28%

27%

23%

22%

Metro Urban Semi Urban Rural

Area wise distribution of Branches

Pan-India Presence

Total 2,047 service outlets – 836

branches, 1 Extension Counter & 1,210

ATMs, including 330 recyclers.

Total 34 e-Lobbies & 291 mini e-Lobbies,

all are having Recyclers.

Specialized branches for Forex,

Industrial, Agriculture, MSME,

Corporate business & Financial

Inclusion.

119 Financial Inclusion branches, 35

Ultra Small branches

Expanding network in northern India

also.

Name Here

25

21

2

4

23

7

11

9

3

520

21

7

51

8

1

7

9

50

11

5

20

1724

39

1

Has the strongest presence in South India with 655 branches

Top 5 States:Karnataka (520), Maharashtra (51), Tamilnadu(50), Andhra Pradesh (39), Telangana (24)

0

500

1000

1500

2000

Mar '17 Mar '18 Mar '19

765 800 836

13801534

1210

Branches ATMs (incl recyclers)

Pioneer in implementing

“Finacle” (CBS) amongst

the first generation

private sector banks

Also offers other

Products such as

NGRTGS, NEFT,

NECS, CTS, Online

Trading, ASBA facility,

Gift Card, Travel Card,

Biometric Smart Card

under Financial

Inclusion, PoS Network,

Online inward

remittance facility to

NRIs etc.

State-of-art IT set up

which has enabled

Anytime Anywhere

Banking through alternate

delivery channels such as

ATMs, VISA International

Debit Card, RUPAY Debit

Card, Internet

Banking, Mobile

Banking, IMPS, e-lobby

etc.

Implemented „M-Passbook‟

(Mobile Passbook), „KBL

Apna App‟ (SMS Banking),

„KBL-Mobile‟ (Mobile

Banking) app, „BHIM KBL

UPI‟ app on Unified

Payment Interface, etc as

additional facilities for the

convenience of customers.

Implemented Lending

Automation Processing System

(LAPS) software for efficient life

cycle management of loan

accounts and improved

monitoring.

Implemented an Enterprise

Level Fraud Risk Management

System (ELFRMS) for effective

cyber fraud prevention across

delivery channels.

Robust technology platform and risk management systems

Strong technology platform

The existing “ISO 27001:2013” certificate encompassing the

Information Security Management System (ISMS) at the

Bank‟s Data Centre, Near line Site [NLS] at Bengaluru and

Information Technology Department including the DR site

[IT & DR] at Head Office, Mangaluru, has been renewed by

AJA Registrars, UK, for a further period of three years up to

March 2022, reflecting the Bank‟s continued commitment to

technology adoption.

8

Robust technology platform and risk management systems

Effective risk management system

2

3

4

1

5

Periodical monitoring & reviewing of risk profile of the bank.

Internal Credit Rating of all the borrowers: Credit exposure above INR 25 lakh are rated borrower-wise and

credit facilities below INR 25 lakh & all schematic advances including agri-credit proposals are rated under

„Pool based approach‟.

Continuous offsite surveillance of borrower accounts.

Effective ALM/mid office set up to monitor Liquidity risk/ Market risk on a continuous basis.

To effectively control possible frauds in “online transactions” done by customers, enterprise level fraud risk

Management solution is implemented.

7

8

6 For effective Operational risk management:

o Bank is building up a database of internal Loss data, near- miss cases and other Operational risk events,since Sept 2007.

o Bank has an effective AML monitoring system to scrutinize the customer transactions to ensurecompliance to the extant guidelines.

Bank has taken all necessary steps for migration to „Basel II advanced approaches‟ under Credit, Market and

Operational Risk and also complied with the extant „Basel III‟ guidelines of RBI.

Bank has implemented a scientific Fund Transfer Pricing (FTP) & Customer Profitability Management System

(CPMS) to assess the performance of branches / products / portfolios / customers.

9

Financial strength of the Bank

Networth (` crs)

283 283 283

4,8605,128

5,503

0

1000

2000

3000

4000

5000

6000

Mar '17 Mar '18 Mar'19

Capital Reserves

3 Months 12 Months

KPAs Q4 FY 19 Q4 FY 18 Q4 FY 19 Q4 FY 18

Turnover 1,23,280 1,10,123 1,23,280 1,10,123

Operating profit 324.23 475.33 1,449.81 1,473.16

Net profit 61.73 11.00 477.24 325.61

Return on Asset 0.32% 0.06% 0.64% 0.49%

Earning per Share 2.18 0.39 16.89 11.52

Return on Equity 4.29% 0.81% 8.53% 6.17%

Net Interest Income 480.88 541.51 1,905.12 1,857.65

Net Interest Margin 2.87% 3.54% 2.93% 3.18%

Gross NPA 4.41% 4.92% 4.41% 4.92%

Net NPA 2.95% 2.96% 2.95% 2.96%

Cost to Income 57.97% 43.14% 50.13% 47.61%

CRAR (Basel III) 13.17% 12.04% 13.17% 12.04%

Highlights – Q4 FY 19

(` crs)

Return and Capital Adequacy Ratios

Return on Equity (%) (after tax) Return on Assets (%) (after tax)

Capital Adequacy (%) - Basel III

11.1

7

13.17

10.4

1

12.2

1

11.2

9

10.8

4

10.5

6

2.001.56

1.090.75 0.76 0.74

11.9811.30 11.60

13.30

12.04

0

4

8

12

Mar '17 Mar '18 Jun '18 Sept '18 Dec '18 Mar '19

Tier I Tier II

10.24%

6.17%

11.89%

10.01% 9.95%8.53%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%


0.74%

0.49%

0.91%

0.76% 0.75%0.64%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%


12

Productivity ratios

Operating Profit per employee (` lakh) * Operating Profit per branch (` lakh) *

Business per employee (` crs) Business per branch (` crs)

* annualised

0.0

5.0

10.0

15.0

20.0

Mar '17Mar '18

Jun '18Sept '18

Dec '18Mar '19

12.5

18.0 18.1 17.8 18.117.5

0.0

50.0

100.0

150.0

200.0

Mar '17Mar '18

Jun '18Sept '18

Dec '18Mar '19

130.2

184.2 182.8177.8 181.0

173.4

0.0

5.0

10.0

15.0

Mar '17Mar '18

Jun '18Sept '18

Dec '18Mar '19

11.7 13.5 13.5 14.0 14.1 14.9

0.0

50.0

100.0

150.0

Mar '17Mar '18

Jun '18Sept '18

Dec '18Mar '19

122.5 137.7 136.9 139.5 141.3 147.5

13

Financial Performance

14

Income & Profit

Net Income (` crs)

996

1,473

369

725

1,126

1,450

452 326

163 275

416 477

0

500

1000

1500


Operating profit Net profit

Operating and Net Profit (` crs)

Net Interest Margins (%) Cost to Income Ratio (%)

(12 months) (9 months)(12 months) (12 months) (9 months)(12 months)

1,90

51,

002

2,135

2,907

469

1,85

8

1,49

1

936 1,

424

711

209

954

809

410

2,8122,300

678

1,346

0

500

1,000

1,500

2,000

2,500

3,000


Net Interest Income Other Income

(3 months) (6 months) (3 months) (6 months)(12 months) (12 months)

2.79%

3.18%

3.00%2.95% 2.95% 2.93%

2.50%

2.60%

2.70%

2.80%

2.90%

3.00%

3.10%

3.20%

3.30%


56.70%

47.61%45.54% 46.13% 47.29%

50.13%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%


17,2

98

17,3

58

19,2

15

45,4

06

46,4

79

48,1

25

17,1

58

17,5

94

16,4

73

43,3

12

42,1

96

40,0

89

1,113

1,3041,1802,2553,081

171

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000


CASA Retail Wholesale deposits *

15

Deposits

Deposits (` crs)

Deposits break up (Mar „19)

56,733

65,14162,871

CASA share to total Deposits

* Wholesale deposits = Purchase liability + Certificates of deposit + Interbank deposits

63,88562,725

22.28%

5.79%

1.63%

70.30%

Savings Bank Current Account

Wholesale deposits Retail Term Deposits

68,452

29.04%

27.99%27.35%

27.08%26.65%

28.07%

20%

21%

22%

23%

24%

25%

26%

27%

28%

29%

30%


Deposits

16

Deposits

NRI Deposits (` crs)

Domestic deposits93.87%

NRI

deposits

6.13%

3,502 3,679 3,796 4,024 4,082 4,196

6.17% 5.85% 6.05% 6.30% 6.27% 6.13%

0%

2%

4%

6%

8%

10%

0

1,000

2,000

3,000

4,000


Amount %

Cost of Deposits

6.73%

6.06%5.88% 5.94% 5.96% 5.96%

5.00%

5.20%

5.40%

5.60%

5.80%

6.00%

6.20%

6.40%

6.60%

6.80%

7.00%


17

Advances [Net] (` crs)

36,916

47,252

47,731

49,970

51,961

54,828

0 15,000 30,000 45,000 60,000

Mar '17

Mar '18

Jun '18

Sept '18

Dec '18

Mar '19

Advances

RatingNo of

BorrowersBalance O/s

(in crs)% to GBC

AAA22

(18)7,925.19

(6,161.32)14.23

(12.77)

AA44

(36)6,284.86

(4,211.27)11.28(8.73)

A37

(28)1,789.11(734.75)

3.21(1.52)

BBB80

(63)1,860.20

(1,641.70)3.34

(3.40)

BB72

(71)1,719.83

(1,840.44)3.09

(3.81)

B33

(34)487.51

(509.37)0.88

(1.06)

C1

(1)12.95

(10.09)0.02

(0.02)

D23

(20)832.44

(1,001.35)1.49

(2.08)

Total312

(271)20,912.09

(16,110.29)37.55

(33.39)

Gross Bank Credit 55,692.75(48,245.51)

External rating wise Credit Portfolio as of Mar „19[ Figures in brackets – as of Mar „18]

Advances

Segmentation of Gross Advances (Mar „19)

CRE

5.94%

Others

4.78%

NBFC

15.22%

Medium

Ent.

2.81%

Other

Personal

loans

5.61%

Large Ent.

15.19%

Housing

13.01%

Agriculture

*

10.94%

Micro-

Small Ent.

18.28%

Infra

8.20%

* However, this works out to 15.81% of the ANBC of 31.03.2018.

52.6

%

45

.1%

45

.1%

45.5

%

43.7

%

42.8

%

10.8%

8.7% 8.8% 9.0% 8.7% 8.4%

36.6

%

46.2

%

46.1

%

45.5

%

47.7

%

48.7

%

0%

25%

50%

75%

100%


Large Corporate Mid Corporate Retail

Retail & Corporate Advances (%)

18

Advances

Priority Sector Advances (` crs)

14

,34

5

16

,15

0

17

,23

9

20

,59

4

21

,87

8

46.82% 47.57% 48.13%52.83%

44.17%

0%

20%

40%

60%

10,000

12,500

15,000

17,500

20,000

Mar '15 Mar '16 Mar '17 Mar ' 18 Mar '19

Amount %

*

Agriculture Advances (` crs)

5,1

46

5,8

37

6,5

83

6,8

78

7,0

82

16.79%17.19%

18.38% 17.64%

15.81%

9 %

1 2 %

1 5 %

1 8 %

0

2 0 0 0

4 0 0 0

6 0 0 0

Mar '15 Mar '16 Mar '17 Mar '18 Mar '19

Amount %

Advances to Weaker Section (` crs)

2,585 2,603 2,544 2,532 2,551

8.44% 7.67% 7.10% 6.50%5.15%

1%

6%

11%

0

1,000

2,000

3,000


Amount %

*19

Credit Deposit ratio (%)

Yield on Advances & Interest Spread (%)

20

CD Ratio & Yield on Advances

65.1% 75.2% 76.1% 78.2% 79.8% 80.1%48.3%

168.4%143.5%

121.6% 103.2%135.8%

160.8%

56.8%

327.1%

193.0%158.6%

86.6%

0%

100%

200%

300%


CD Ratio Incremental CD Ratio [Annual] Incremental CD Ratio [Quarter]

10.81%9.84% 9.29% 9.34% 9.37% 9.33%

4.08% 3.78% 3.41% 3.40% 3.41% 3.37%

0%

5%

10%


Yield on advances Interest spread

21

NPAs

Gross NPAs (` crs)

1,5

82

2,3

76

2,2

97

2,3

72

2,3

46

2,4

56

4.21%4.92% 4.72% 4.66% 4.45% 4.41%

0%

2%

4%

6%

0

500

1,000

1,500

2,000

2,500


Gross NPA Gross NPA %

Net NPAs (` crs)

97

5 1,4

01

1,3

96

1,4

98

1,5

61

1,6

17

2.64%2.96% 2.92%

3.00% 3.00%2.95%

0%

1%

2%

3%

0

300

600

900

1200

1500


Net NPA Net NPA %

22

328

763

772

583

574

574

Of which, NPA

Restructured Advances(` crs)

SectorRestructured

Adv.Of which,

NPA

Large Industry 380.99 380.99

Infrastructure 168.55 167.88

MSME [excl. Infrastructure] 134.08 16.07

Agriculture 68.92 8.73

Education[Individual + Institution]

49.65 -

Housing 25.32 0.01

Others 22.13 -

Consumption loans 22.09 0.03

Wholesale/Retail Trade [excl.

services]0.67 -

Grand Total 872.40 573.71

Sector wise Restructured Adv. as Mar „19:

Restructured loans & related accounts

402

489

466

417

412

406

932

562

557

433

484

489

0 500 1,000

Mar '17

Mar '18

Jun '18

Sept '18

Dec '18

Mar '19

Restructured loans Related a/cs

872

1,046

819

1,046

1,365

901

23

No. of a/cs Amount (` in cr)

Opening balance as on 31.12.2018

25 333.57

Addition 5 62.06

Deletion / Upgradation

19 227.22

Position as on 31.03.2019

11 168.41

SMA2 Movement

24

Investments

Investments [excl. RIDF] (` crs)

20,22015,444 16,185

0

5,000

10,000

15,000

20,000

Mar '17 Mar '18 Mar '19

Debentures

, Bonds, CD,

MF

15.28%

SLR

84.37%

Shares

0.35%

Yield on Investments (%)

7.23%6.73% 6.76%

4%

6%

8%

Mar '17 Mar '18 Mar '19

HFT

0.15%AFS

20.78%

HTM

79.07%

AFS HFT HTM TOTAL

2.30 0.01 5.22 4.58

Duration

2525

Share holders‟ value

Dividend (%)

Earning Per Share (`)

Book value (`)

Banks, FIs, MF, I

nsurance Cos

15.96%Foreign Portfolio Investors14.57%

Indian Public60.03%

Others9.44%

Share holding pattern (Mar „19)

0.00

5.00

10.00

15.00

20.00

Mar '17Mar '18

Mar '19

19.38

11.52

16.89

0%

20%

40%

60%

80%

100%

Mar '17Mar '18

Mar '19 proposed

40%30% 35%

0

100

200

300

Mar '17

Mar '18

Mar '19

181.97 191.44204.71

26

Leveraging on Technology

Migration to Digital Channel

[share of ADC transactions to total CBS transactions]

44.49%

50.41%53.06%

65.34%

77.86%

20%

40%

60%


27

Mobile Banking

1120

1198

1295

1355

1436

As on 31.03.2018 As on 30.06.2018 As on 30.09.2018 As on 31.12.2018 As on 31.03.2019

No.of Regd users (Thousands)4

60

9

53

07

60

37

70

17

67

83

50

58 66

76 75

Q4(FY17-18) Q1(FY18-19) Q2(FY18-19) Q3(FY18-19) Q4(FY18-19)

No. of Transactions (in 000's)

Avg. Transactions per day (in 000's)

51

21

54

27

63

10

72

75

73

11

56 60

69

79 81


Value of Transactions (in Crore)

Avg. value of Transactions per day (in Crore)

28

Deb

it c

ard

s P

en

etr

ati

on

Card

s U

sag

e

Debit Cards

41.2642.95

44.8446.64

48.5980.70

81.83

83.06

84.4185.19


Total cards issued (Lakhs) Penetration (%)

75.43 79.84 93.14 99.5 108.64

107.06 106.26 111.09 114.89 113.36

182.49 186.10 204.23 214.39 222.00


Total ATM transactions by our Debit Card holders(lakhs)

Shared Network (VISA/NFS) (lakhs)

KBL ATM (lakhs)

29

PO

S T

ran

sact

ion

Valu

eP

OS

In

stall

ati

on

Rep

ort

Point of Sale (POS) Business

13225 13083 14116 1399212816

1918

850

1813

982

727


No. of Machines Installed New Machines Added

4402654000 54459

66444 62790


Value of Transactions (Lakhs)

30

PO

S T

ran

sact

ion

sE

CO

M

Tra

nsa

ctio

ns

POS & ECOM transactions

35

82

40

97

45

42

49

51

50

93

39

45

5054

57


Txn (Thousand) per day (Thousand)

51

1.2

5

60

6.2

4

61

6.7

2

67

6.1

2

66

9.2

7

5.5

6.6 6.8 7.37.3


Amt (Crore) per day (Crore)

23

69

24

54

27

82

31

13

33

55

2627

31 34

36


Txn (Thousand) Per day (Thousand)

20

8

22

3 25

2 28

0

28

9

2.20

2.452.77

3.00 3.10


Amt (Lakhs) Per day (Lakhs)

31

Annexure

` crs Mar-17 Mar-18 Mar-19

Total Deposits 56,733 62,871 68,452

CASA Deposits 16,473 17,594 19,215

Retail Deposits 40,089 42,196 48,125

Wholesale Deposits 171 3,081 1,113

Total Advances 36,916 47,252 54,828

Priority Sector Advances 17,239 20,594 21,787

Agri Advances 6,583 6,878 7,082

MSE Advances 8,496 9,683 10,178

Advances to Weaker Section 2,544 2,532 2,55132

Deposits & Advances

` crs Mar-17[12 months]

Mar-18[12 months]

Mar-19[12 months]

Interest Income 5,185 5,424 5,906

Interest Expense 3,694 3,566 4,001

Net Interest Income 1,491 1,858 1,905

Fee Income 505 757 839

Treasury Income 304 197 163

Non-Interest Income 809 954 1,002

Total Income (Net of Interest Expense) 2,300 2,812 2,907

Operating Expenses 1,304 1,339 1,457

Operating Profit 996 1,473 1,450

Provision for loan losses in Adv. / losses in Invts. / Taxes / other

544 1,147 973

Net Profit 452 326 47733

Income & Expenditure

` crs Mar-17[12 months]

Mar-18[12 months]

Mar-19[12 months]

Interest Income

Interest Income 5,185 5,424 5,906

Interest on Advances 3,794 4,082 4,698

Interest on Investments 1,271 1,162 1,106

Other interest 120 180 102

Yield on Advances 10.81% 9.84% 9.33%

Adjusted yield on Invts. 8.88% 7.31% 7.58%

Interest Expense

Interest Expense 3,694 3,566 4,001

Interest on Deposits 3,601 3,473 3,823

Other interest 93 93 178

Cost of Deposits 6.73% 6.06% 5.96%

Net Interest Income

Net Interest Income 1,491 1,858 1,905

Interest Spread in Lending 4.08% 3.78% 3.37%

Net Interest Margin on average earning assets 2.79% 3.18% 2.93%34

Interest Income & Interest Expenditure

` crs Mar-17 Mar-18 Mar-19

Total Risk Weighted Assets 38,902 44,981 47,880

Total Capital Fund 5,172 5,414 6,307

Total Tier I Capital 4,749 5,079 5,349

Paid up Equity Capital 283 283 283

Reserves under Tier I Cap. 4,467 4,796 5,067

Total Tier II Capital 423 335 959

Surplus Provisions & Reserves 258 235 164

Subordinated Debt Fund 165 100 795

Total CRAR 13.30% 12.04% 13.17%

CRAR Common Equity Tier I Capital 12.21% 11.29% 11.17%

CRAR Tier I Capital 12.21% 11.29% 11.17%

CRAR Tier II Capital 1.09% 0.75% 2.00%35

Capital Adequacy under BASEL III

Corporate Social Responsibility

Foundation Stone Laying ceremony of the open stage theatreproposed to be constructed with the support of the Bank under itsCSR initiatives at the premises of University College, Mangaluru.

Donation of the Embosser machine to M/s MitraJyoti for promoting the training and education ofvisually impaired students.

36

Successful migration to Finacle 10.

Launched Cash@PoS facility & Deposit Only Card.

Launched Centralized Account Opening process for CASA accounts.

Launched DigiLocker Account facility through MoneyClick® Internet Banking.

06Content Here

01

Integrated Bank‟s education loan scheme with Govt of India‟s Vidya Lakshmi Portal for online education loan.

Implemented many of the Robotic Process Automation.

Launched new mobile banking app „KBL-Mobile Plus‟.

02

04

03

06

05

07

Other initiatives / developments

Partnered with Karvy DigiKonnect for Contact Centre Services

Tied up with Bharti AXA Life Insurance Co. Ltd for Life Insurance Business and Launched „QR code‟ instant two-wheeler insurance policy.

08

09

Easy to change

colors, photos and Text.

Content Here

52% 34%

Launched Regional Loan Processing Centres [RLPCs] at all the

Regions.

Focus on Housing, Retail & MSME loans at these RLPCs.

Tied up with more number of DSAs, BSAs and MRAs, pan India, to

strengthen the credit portfolio.

Tied up with Fintech companies for Digital Home Loan sourcing.

Launched “KBL FORCE” - an integrated Lead Management System

(LMS) and KBL-FORCE (LMS) Mobile App.

Verticalized Credit Department as “Sales vertical” and “Sanctions

vertical”.

Introduced Collection Management System.

As a part of Transformation journey

Launched “KBL KOLLECT+” – a Collection tool, on pilot basis

at Regional Collection Hub in Bengaluru.

Launching of Monitoring Excellence Initiatives.

A new institutional SB product called KBL SB-TASC (Trusts,

Associations, Societies & Clubs) was launched.

Implementation of Employee Satisfaction and Career

Development System [ESCDS] and Key Result Area [KRA].

Launched ESOP scheme.

Revamped Internet Banking to improve customer experience.

Bank‟s first „Digi Branch‟ was inaugurated at Bengaluru.

Established Digital Centre of Excellence (DCoE).

KBL-Vikaas – Bank‟s Transformation Journey

BCG as transformation consultant

Awards & AccoladesAwards & accolades received during the FY 2018-19:

“SMEs Excellence Award – 2018” under “Excellent Service

(Private sector)” category, instituted by ASSOCHAM.

“Best MSME Bank Award – Runner Up” instituted by

Chamber of Indian Micro Small & Medium Enterprises

[CIMSME].

“Best Performing Bank” under the following categories of

Atal Pension Yojana,

„People First‟ campaign at Tamilnadu for 100% branch

activation,

„Icons of inspiration‟ campaign, held during 2017-18,

„Best Private Bank‟ during 2017-18,

„Winners Arts of Possible‟ campaign 2018-19,

„Winners of Winning Wednesday‟ campaign – New

Delhi – R K Puram Branch,

„Winners of Winning Wednesday‟ campaign – Delhi

Regional Office,

Lead to Leap for FY 2018-19,

STP Award 2017: In recognition of Bank‟s outstanding

payment formatting and straight through rate, instituted by

Bank of New York, Mellon.

ET Now - BFSI Awards under

“Bank with Best Technology Orientation”

“Best Corporate Social Responsibility Practices”

ET Now – World HRD Congress Awards under

“Bank E-Learning module online”

“Best Employee Engagement in Banking Sector”

“Best Change Management Program”

“Best Learning & Development Strategy”

“Best use of Training in Employee Engagement”.

ASSOCHAM Social Banking Excellence Awards – 2018 :

Winner – Technology

Runner Up – Priority sector lending other than Agriculture

Runner Up – Overall best social banking.

IBA Banking Technology awards – 2019 in “Most Customer Centric

Bank” under Small bank category.

40

Business Strategy

AB

C

Business Turnover of ` 1,44,000 crore.

Opening of 24 new Branches to take the total no. of Branches to 860.

To introduce following products & services:

Digitization for housing, personal & auto loans.

Launching of online mutual fund platform

Setting up of Contact Centre

Corporate Goal for 2019 -20

DOther initiatives:

Opening of Regional Collection Hubs at all Ros

Rebranding exerciseWomen @ KBL – a

special initiative to create career path for women employees

Starting a wholly owned non-financial subsidiary – KBL Services (P) Ltd.

Business Strategy

42

Digital Banking initiatives

Focusing on digital marketing of Bank‟s products & services

Value addition to Bank‟s existing Mobile Banking channel

Installation of self service kiosks Comprehensive IT and Digital

Strategy – Requirement of critical applications and IT infrastructure

Para banking activities.

Partnering with an efficient call center handling company for handling service calls for better customer service and handling sales and collection calls for marketing and credit monitoring.

Minimum space maximum business.

Credit augmentation Focusing on MSME sector Focusing on mid-corporate & retail

sectors Redesigning Home loan product Flow based lending and an exclusive

personal loan product.

NPA & Stressed Assets management

Minimizing slippages and improving recovery management.

A comprehensive collection mechanism.

CASA depositsFocusing on customer onboarding

to increase CASA as well as cross selling.

Thank You

WE EXPRESS OUR HEARTFELT GRATITUDE

TO ALL OUR STAKE HOLDERS FOR THEIR

TRUST & SUPPORT AND SOLICIT THEIR

CONTINUED PATRONAGE, AS WE

CONTINUE OUR JOURNEY WITH RENEWED DEDICATION &

COMMITMENT TO MAKE OUR BELOVED KARNATAKA BANK A

FINANCIAL POWER HOUSE.

Board of Directors

P Jayarama Bhat

Non Executive Chairman

44

Ashok HaranahalliBengaluru

Advocate

Rammohan Rao Belle Bengaluru

Former MD & CEO, SBI Gen. Insu. Co. Ltd

B A PrabhakarBengaluru Former Chairman & MD of Andhra Bank

U R Bhat

Mumbai

Investment Adviser & Columnist

Keshav Krishnarao Desai

Hubballi

Businessman

D. Surendra Kumar,

Shri Kshethra Dharmastala,

Dakshina Kannada

Educationist

Mahabaleshwara M S

Managing Director & CEO

Mrs Mythily Ramesh,

Bengaluru

IT Professional and Co-Founder &CEO of NextWealth

Disclaimer

This presentation has been prepared by Karnataka Bank (the “Bank”) solely for providing information about the Bank. This presentation is confidential and may not be copied or disseminated, in whole or part, in anymanner. This presentation has been prepared by the Bank based on information and data which the Bank considers reliable, but the Bank makes no representation or warranty or undertaking, express or implied,

whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness, correctness and reasonableness of the contents of this presentation. This presentation has not been approved and will not bereviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India and may not comply with all the disclosure requirements prescribed thereof. This presentation may not be all

inclusive and may not contain all of the information that you may consider material. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment topurchase or subscribe for any securities. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded. No representation or warranty, express or implied is made as to, and no

reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. Neither the Bank nor any of its respective affiliates, advisers or representatives, shall haveany liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information contained in

this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking statements”, including those relating to theBank‟s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ from these

forward-looking statements due to a number of factors, including future changes or developments in the Bank‟s business, its competitive environment, information technology and political, economic, legal and socialconditions in India and worldwide. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue

reliance on these forward-looking statements. The Bank disclaims no obligation to update forward looking statements to reflect events or circumstances after the date thereof. This presentation is for general informationpurposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation and any information presented herein are not intended to be, offers to sell or

solicitation of offers to buy the Bank‟s equity shares or any of its other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The Bank‟s equityshares have not been and will not be registered under the U.S. Securities Act 1993, as amended (the Securities Act”) or any securities laws in the United States and, as such, may not be offered or sold in the United States or

to, or for the benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) absent registration or an exemption from the registration requirements of the Securities Act and applicable laws. Anyoffering of the equity shares made, if any, in the United States (or to U.S. persons) was made by means of a prospectus and private placement memorandum which contained detailed information about the Bank and its

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