KVB Aims to Outpace the Pack: Banking on 2% Extra Credit Growth in FY26

Unknown Apr 02, 2026 1,150 Views

Karur Vysya Bank (KVB), a top private sector bank with its presence in Tamil Nadu, has outlined its goal to deliver credit growth at least 2% better than the overall banking sector in the fiscal year 2025-26 (FY26). This strategical initiative is being made against the backdrop of a dynamic finan...

Growth Ambitions and Strategy

KVB expects its credit growth to surpass the industry average by more than 2% in FY26, building on strong momentum from its retail, agriculture, and MSME (RAM) segments.
The bank plans to open 28 new branches in the first half of FY26, focusing on expanding its footprint in Southern and Western India.
Deposit growth is targeted at around 13%, with a shift towards sustainable, lower-cost funding channels.

Financial Performance and Asset Quality

KVB recorded a 12.6% year-on-year growth in net profit at ₹513.4 crore and a 9.1% growth in net interest income at ₹1,089.2 crore for Q4 FY25.
Asset quality is strong: Gross NPA was at 0.76% and Net NPA was at 0.20% as of Q4 FY25.
The bank is guiding for net interest margins (NIM) in the range of 3.7% to 3.75% for the year, even as the interest rate environment weakens.

Market and Policy Outlook

KVB's management expects a more accommodative monetary policy by the Reserve Bank of India, such as possible rate reductions to spur demand and lend support to growth.
The bank is guardedly optimistic for FY26, based on the requirement to contain margin pressures and keep an eye on asset quality, particularly in the context of the recent geopolitical developments.

Risk Management and Strategic Focus

KVB iswithdrawn selectively from riskier segments of personal loans, BNPL, and auto finance and concentrated on granular secured retail advances to retain margins and asset quality.
The bank will post superior profitability numbers, with return on assets (RoA) seen at 1.6–1.7% and return on equity (RoE) at 16–18% for FY26–28.
Industry experts have a favorable view of KVB, with a 'Buy' and a target of ₹300 per share.

Outlook

KVB's approach of exceeding industry credit growth, growing its branch footprint, and ensuring robust asset quality bodes well for sustained performance in FY26. The bank's emphasis on margin stability and disciplined risk management will assist it in navigating a shifting economic and policy landscape.

Sources: Business Standard, The Hindu Business Line, CNBC TV18, Economic Times BFSI, Moneycontrol

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