According to reports from The Economic Times, Karur Vysya Bank plans to reverse its decade-long downsizing of wholesale business by raising corporate loan share to 20% in the next two years from the current 14%. The bank's corporate loan share had declined from 40% in 2019 to the current level, but management sees opportunities in commercial real estate and lease rental discounting. The bank grew its corporate book by 12% last year and is implementing a credit substitution strategy, subscribing to non-convertible debentures and commercial papers instead of providing working capital loans.
As reported by The Economic Times, the bank is exploring four key diversification areas to push growth. The microfinance portfolio has grown from zero to ₹180 crore over the past 1.5 years through partnerships, with plans to expand to ₹500-700 crore. The bank is also entering credit card business, targeting its 80 lakh BNPL customers through Amazon partnership, with plans to launch credit cards within the next two months. Additionally, the bank is exploring loans against mutual funds and affordable housing loans between ₹20-50 lakh through co-lending partnerships.
According to The Economic Times, the bank achieved 17% growth in FY26, one to two percentage points above industry growth of 16.1%. For FY27, management has provided guidance of 16-18% growth while maintaining LCR of 115-120% and net interest margin of 3.75-3.8% compared to 4.25% in Q4. The bank expects return on assets of 1.7-1.8% and plans to raise deposits by 12-14% to maintain liquidity requirements.
As reported by The Economic Times, Karur Vysya Bank maintains a loan asset portfolio of ₹99,000 crore and market capitalisation of around ₹28,000 crore. The bank has a loan-to-deposit ratio of 80:20 and is focusing on affordable housing opportunities in the ₹20-50 lakh segment through co-lending arrangements. Management emphasizes that diversification across microfinance, credit cards, and affordable housing will help improve yields and reduce concentration risk in the core lending business.
