Is there an issue with this Private Bank? Why CEO has resigned?

 

Several news outlets have reported that Srikrishnan Hari Hara Sarma, the managing director and chief executive officer of Karnataka Bank, has resigned. On Friday, he turned in his resignation. But why did he step down? Internal disagreements with the bank's board of directors over a financial matter seem to be the cause of his resignation.

According to sources, Srikrishnan H., the MD and CEO of Karnataka Bank, has resigned and will leave the company on June 30. According to reports, Executive Director Sekhar Rao would also step down by July 30.

Reports state that the problem stemmed from a May consulting fee of Rs.1.53 crore, or roughly 15.3 million rupees. The bank's board did not sanction this money, which was utilized for consulting and related services. Furthermore, it was stated that this sum exceeded the financial thresholds that the bank's senior directors, also known as whole-time directors, are permitted to spend without board consent.

The statutory auditors of the bank observed this expenditure and noted that:

• It was done without proper approval.
• The money may possibly need to be recovered from the directors who approved the payment.

An investor asked the bank about this matter on the most recent earnings call. CEO Sarma responded by acknowledging the problem but attempting to downplay how terrible it was.

Sarma added that there was a misinterpretation of the internal policy of the bank. The error resulted from that confusion. He went on to say that the policy has been updated and clarified, and that similar errors won't occur again.

With more than 40 years of expertise in the banking sector, Sarma is a highly skilled banker. In May 2023, he was appointed Karnataka Bank's first foreign (outsider) chief executive officer. Prior to his nomination, all of the bank's previous CEOs had been longtime staff members who advanced through the ranks, therefore this was a significant shift for the organization.

Following a rigorous selection process, he was appointed. This time, the bank did not select an internal candidate. The bank's board of directors selected Sarma after the experts evaluated several profiles and suggested names.

His Career Journey:

• Started at Bank of America – This is where he began his banking career.
• Was one of the early employees of HDFC Bank – a leading private bank in India.
• He was part of the founding team at Yes Bank, which means he helped start the bank from scratch.
• Before joining Karnataka Bank, he served as the Managing Director and CEO of Jio Payments Bank from April 2015 to November 2021.

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Karnataka Bank Q4 net profit up 15%

Private sector lender Karnataka Bank on Wednesday posted an all time high annual net profit of Rs. 483 crore for the financial year 2020-21, registering a 12% growth over the previous year’s revenues.

The net profit for the fourth quarter ended March 2021 is Rs. 31.36 crore, a 15% jump over the previous year. The bank’s board also recommended a dividend of 18%.

“This turned out to be the best result under the unprecedented tough conditions triggered by Covid-19 pandemic,” Bank’s managing director Mahabaleshwara MS said in a press release.

The business turnover of the bank was at Rs. 1,27,348 crore as on March 31, 2021. The deposits stood at Rs. 75,655 crore and advances at Rs. 51,694 crore. The CASA deposits grew 15% and reached an all time high of 31% of total deposits as on March 31, 2021.

Mahabaleshwara said vaccinations coupled with other measures including restructuring by the RBI will help needy borrowers and the banking sector overcome the challenges posed by the pandemic.

The bank also announced the appointment of Balakrishna Alse S, a former executive director of Oriental Bank of Commerce, as an additional director on its board.

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Karnataka Bank Q3 results: Net profit grows 10%

Karnataka Bank has posted a net profit of Rs 135 crore for the December quarter of current financial year with a growth rate of 10% as against Rs 123 crore during the corresponding quarter of last year.

The bank posted a net profit of Rs 451 crore for the nine-month period ended December 2020, posting a growth of 11.5% over the same period of last year, the bank said in a press release, and added its net NPA has dropped to 1.74%.

Bank chief executive Mahabaleshwara MS said the strong numbers reflected the resilience of the bank in spite of Covid-19 pandemic. “Our efforts to realign the asset portfolio towards retail and mid corporate advances are paying desired results. All our cost efficiency measures have yielded positive results as the overall cost declined by 2.35%. The digital loan sanction is showing positive traction and gaining popularity.”

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Karnataka Bank Q4 net profit down 55.76 per cent

Karnataka Bank Ltd registered a net profit of Rs.27.31 crore in the fourth quarter of 2019-20 as against a net profit of Rs.61.73 crore in the corresponding period of the previous fiscal, recording a decline of 55.76 per cent.

The board of directors of the bank met on Saturday to consider the audited financial result for 2019-20.

The gross NPA of the bank stood at 4.82 per cent during the Q4 of 2019-20 as against 4.41 per cent in the corresponding period of 2018-19. The net NPA was at 3.08 per cent (2.95 per cent) during the period.

Provisions (other than tax) and contingencies increased to Rs.356.50 crore during the Q4 of 2019-20 as against Rs.217.73 crore in the corresponding period of the previous fiscal.

Quoting Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, a press release said that the financial year just concluded was no doubt challenging but the bank has been able to sail smooth.

He said the operational efficiency has further got momentum. As a result, stressed assets were further moderated during the financial year. The bank also focussed on resilience by improving the PCR (provision coverage ratio). The PCR improved to 64.70 per cent as on March 31 2020 2019-20 from 58.45 per cent as on March 31 2019, he said.

NII

The net interest income (NII) of the bank stood at Rs.529.3 crore (Rs.480.88 crore), and the other income at Rs.440.37 crore (Rs.290.59 crore) during Q4 of 2019-20. The net interest margin (NIM) was at 2.86 per cent (2.87 per cent) during the quarter.

The bank recorded a net profit of Rs.431.78 crore for 2019-20 as against Rs.477.24 crore for 2018-19.

“Going forward even though COVID-19 pandemic era is a phase of uncertainties’, the bank is committed to ‘conserve, consolidate and emerge stronger’ by having a conservative approach,” Mahabaleshwara said.

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Karnataka Bank Q3 profit falls 12%

Private sector lender Karnataka Bank on Thursday reported a 12 per cent decline in its net profit at Rs 123.14 crore for the third quarter ending December 31, 2019 on account of rise in bad loans.

The Mangalore-headquartered bank had reported a net profit of Rs 140.41 crore in the year-ago period, the bank said in regulatory filing.

However, the total income of the bank rose to Rs 2,023.68 crore from Rs 1,815.79 crore in the same quarter a year ago.

The gross non-performing asset (NPA) of the bank rose to 4.99 per cent of assets from 4.45 per cent in the year-ago period.

Similarly, the net NPA too increased to 3.75 per cent from 3 per cent during September-December 2018.

As a result, provisions (other than tax) and contingencies rose to Rs 314.70 crore from Rs 208.99 crore in the third quarter of the previous fiscal.

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Karnataka Bank Q2 profit drops 5.3% as bad loans go up

Karnataka Bank on Tuesday reported a 5.3% fall in net profit at Rs105.91 crore for the second quarter ended September of the current fiscal as bad loans increased marginally.

The private sector bank had posted a net profit of Rs111.86 crore in the corresponding July-September quarter of the previous fiscal ended March 2019.

The bank's total income rose to Rs1,938.40 crore during September quarter of 2019-20 as against Rs1,653.81 crore in the year-ago period, the bank said in a regulatory filing.

The asset quality of the bank showed a slight blip as gross non-performing assets (NPAs) rose to 4.78% of the gross advances as on September 30, up from 4.66% a year ago.

In absolute value terms, gross NPAs stood at Rs2,594.27 crore as against Rs2,371.62 crore.

Similarly, net NPAs or bad loans rose to 3.48% (Rs1,863.11 crore) from 3% (Rs1,497.68 crore) a year ago.

The provisions for bad loans and contingencies too were raised to Rs262.40 crore for July-September from Rs193.22 crore in the corresponding quarter of 2018-19.

Provision coverage ratio as on September 30 stood at 59.19% (57.49% as on September 2018), the bank said.

The bank clocked a total business of Rs1,23,658.07 crore, registering a year-on-year growth of 8.61%. Deposits rose to Rs70,189.65 crore, up 9.87%, it said.

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Karnataka Bank reports record quarterly profit in Q1FY20

Mangaluru headquartered private sector Karnataka Bank posted an all-time high quarterly net profit of Rs 175 crore in the April-June quarter, registering 7.5 per cent growth year-on-year. 

The business turnover of the bank touched Rs 1,21,340 crore as on June 30, recording 10 per cent growth on a year-on-year basis. Gross NPAs declined to 4.55 per cent compared to 4.72 per cent reported in the corresponding quarter of the previous year as of June 30, according to a press release from the bank. 

Bank MD Mahabaleshwara MS said: “I am confident of keeping the momentum going as the bank has registered all round growth in almost all spheres of banking.” The performance, he added assumed significance as it had been delivered in a not so favorable economic condition.” 

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Karnataka Bank Recruitment 2019

Karnataka Bank has published an Advertisement for below mentioned Posts 2019. Other details like age limit, educational qualification, selection process, application fee and how to apply are given below in the advertisement.

Posts: Clerk

Educational Qualification: Candidates having Graduation Degree in any Discipline from any recognized University/Institute will be eligible for this post.

Language Knowledge: Candidates having any of the vernacular/state language knowledge along with English & Hindi in Reading, Writing & Speaking will be eligible for this recruitment.

Computer Proficiency: Candidates having Basic Knowledge in Computers will be eligible for this recruitment.

Age Limit: (As on 01/July/2019)

Maximum: 26 Years

Age Relaxation (Upper Age Limit)-

SC/ST: 05 Years

OBC: 03 Years

Application Fees: 

General /OBC – Rs. 600/-

SC/ST/PH – Rs. 500/-

Payment will be made through Debit Card/Credit Card/Net banking/E Challan

Pay Scale: Rs.37,000/- Per Month

Selection Process: Candidates will be selected based on an interview.

How to Apply: Interested Candidates may Apply Online Through official Website.

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Official Website: Click Here

Apply Online: Click Here

Important Dates:

Starting Date of Online Application: 10-07-2019

Last Date to Apply Online: 20-07-2019

Fee Payment Last Date: 20-July-2019

Last Date Complete: 20-July-2019

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