Karur Vysya Bank attributes record profits to a series of strategic measures by the bank
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Ramesh Babu B, Managing Director & CEO, The Karur Vysya Bank
| Photo Credit: KSL
Karur Vysya Bank’s record profitability this quarter stems from strategic measures to optimize deposit costs, fund yields, and recovery mechanisms, according to bank leadership.
“We achieved a 16 basis point reduction in funding costs through efficient deposit mobilization and treasury management this quarter,” stated Ramesh Babu B, MD & CEO of Karur Vysya Bank.
The bank shifted from MCLR-linked loans to fixed-rate products like gold loans, increasing fixed-rate advances from 8% to 23% of its portfolio. “Gold loans now have an internal cap of 35% to prevent over-reliance on a single product,” Babu clarified.
Credit quality improvements significantly contributed to performance. “With ₹97,000 crore in assets, net NPAs stand at ₹200-300 crore. Digital initiatives and proactive monitoring reduced provisioning needs,” the CEO explained.
Retail, Agriculture, and MSME (RAM) segments comprise over 80% of the loan book, while corporate exposure has decreased from 35% to 14%. “Our corporate portfolio focuses on selective sectors like commercial real estate that align with our risk appetite,” Babu noted.
The bank maintains minimal stress in its MSME portfolio despite sector challenges. “Textile sector exposure remains limited, and our MSME clients have adapted well to tariff changes,” he added.
Deposit growth strategies evolved from physical expansion to data-driven approaches. “We reduced new branch openings while deploying 1,300 field associates focused exclusively on deposit mobilization,” Babu revealed.
Financial metrics show 15.6% YoY deposit growth and 17.2% loan book expansion in Q3FY26, with Return on Assets reaching 2.05%.
Operational restructuring has centralized routine banking functions in Coimbatore. “Our 300-member central unit handles operations, enabling branches to focus on client acquisition and sales,” the CEO concluded.
Published on January 27, 2026
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