Private sector lender Karur Vysya Bank (KVB) is undertaking a comprehensive overhaul of its credit card business, reassessing its strategy end-to-end as it prepares to introduce new card variants next quarter. The bank is reworking its approach to the segment to ensure sustainable and calibrated growth.
Speaking to analysts during a post-earnings conference call, Ramesh Babu Boddu, Managing Director and CEO of KVB, said the bank is in the process of revamping its credit card portfolio and is likely to roll out new variants by the end of the fourth quarter. “We will grow this business in a measured manner. After evaluating multiple factors, we will decide on scaling it up,” he noted.
As part of business expansion, KVB has begun offering affordable housing loans on a limited scale and is in the final stages of technical integration with co-lending partners to expand this business further. The bank has also rolled out a small business group relationship model across 79 branches. Identifying strong growth potential in this segment, KVB has tasked relationship managers with acquiring new small business customers, while ensuring quality disbursements and sustained customer engagement.
Despite a challenging interest rate environment, KVB’s corporate loan portfolio grew 6% quarter-on-quarter. The bank has identified selective growth opportunities in segments such as commercial real estate, capital markets, and EPC contractors. According to the management, these segments allow the bank to grow its loan book while maintaining desired spreads and staying aligned with its risk appetite.
On the liabilities front, the bank’s liability business accounts for 54% of its total business. Total deposits rose 4% in the third quarter, supported by growth in both retail term deposits and CASA. CASA balances increased by 2% during the quarter, with demand deposits growing by 1% and savings deposits by 2%.
Looking ahead, KVB has reiterated its guidance to outperform industry credit growth by over 2% for the full financial year. The bank expects net interest margins (NIM) to remain in the range of 3.9%–3.95%, while return on assets (RoA) is projected to exceed 1.85%. Asset quality is expected to remain stable, with gross NPA below 1.5%, net NPA under 1%, and slippages capped at less than 1% of the loan book.