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News: Karnataka Bank reported muted performance in Q3FY24. Advance growth remained lower at 9.5% YoY to Rs 69741 crore. Deposit increased at 9 YoY. Slippages from restructured book led 17 bps QoQ increase in GNPA at 3.64%, while NNPA increased by 19 bps QoQ to 1.55%. Operationally NII remained flat with 12 QoQ decline in margins at 3.46%. Higher other income and lower provisions offset growth in opex resulting in 10% YoY growth in earnings at Rs 331 crore.
Views: Post equity issuance of Rs 800 crore in Q3FY24, board meeting is scheduled to raise remaining Rs 700 crore of capital. Slower business growth, flat NII and higher slippage from restructured book could impact near term valuation.
Impact: Negative