The Karur Vysya Bank Ltd expects its credit growth to outpace industry growth by 1-2% during FY27 despite global macroeconomic uncertainties, geopolitical tensions and pressure on margins.
The bank expects slippages to remain below 1% of the asset book during FY27, while liquidity coverage ratio (LCR) is projected to remain in the range of 115-120%.
Net interest margins (NIMs) are expected to remain between 3.75% and 3.8% for the full year, while return on assets (RoA) is projected at 1.7-1.8%.
Cautious approach
The Tamil Nadu-based private sector lender said it would adopt a cautious and calibrated growth strategy while maintaining focus on asset quality and profitability amid evolving global and domestic conditions.
Karur Vysya Bank Managing Director & Chief Executive Officer B. Ramesh Babu said during the earnings call that the global financial system continues to face uncertainty due to tariffs, trade restrictions, industrial policies and geopolitical conflicts, particularly in West Asia.
He said higher energy prices, freight costs, insurance expenses and supply chain disruptions could impact expansion plans and business growth during the current fiscal.
Focus on Growth And Relationships
The bank expects its retail, agriculture and MSME (RAM) segments to continue driving growth momentum during FY27.
According to him, a small business group will focus on increasing ticket sizes through its relationship manager-led approach, while the business banking vertical will target export-oriented and non-fund-based businesses to improve fee income.
The bank also indicated that margins in the MSME segment could come under pressure as it prioritises customer relationships and growth over profitability.
KVB plans to launch premium credit cards during the first half of FY27. It is also in the final stages of integrating its loan-against-mutual-fund platform.
Gold loan with internal cap
The lender said it would pursue corporate lending through a risk-calibrated approach considering uncertainties in the external environment.
Gold loans account for nearly 30% of the bank’s overall loan portfolio, with an internal cap fixed at 35%. The bank said growth in the gold loan business would depend on prevailing conditions in retail and agriculture lending. Enhanced monitoring systems are in place to manage fluctuations in gold prices and maintain portfolio quality.
Branch expansion
KVB plans to open 50 new branches during FY27, including 38 regular branches and seven lite branches.
The bank is also strengthening its presence outside Tamil Nadu by partnering with institutional clients and state government bodies to improve recurring payment flows, deposits and customer visibility in new markets.