However, as the world comes to terms with these changes, we continued to display resilience, adaptability, and unwavering commitment to growth, ensuring that we not only weathered the storm but also flourished in the face of adversity.
Through strategic foresight and our collective efforts, we managed to sustain our growth trajectory amidst the ever-evolving environment.
The global economy remains under stress as the war between Russia and Ukraine rages on into its second year and the global supply chain continues to be riddled with inefficiencies. The instability in the US banking sector further raised concerns and contributed to economic uncertainty. As a consequence, IMF expects the global economic growth to slowdown to 2.8% during CY 2023.
While surging inflation rates and high energy and commodity prices plagued the economy in CY 2022, there seems to be signs of a gradual recovery. Central banks across the world have taken synchronised action by raising interest rates to bring inflation closer to the target rate. As the commodity prices begin to settle down, the rising disposable income is set to provide growth stimulus.
Amidst the global headwinds, the Indian economy has remained resilient and continues to grow at a steady pace with the advance estimates of the NSO showing a 7.2% growth during FY 23. This growth can be largely attributed to the Government’s focus on structural reforms, favourable domestic policies and a robust banking sector.
The credit offtake for the Indian banking industry remained strong as credit growth accelerated to 15% in FY23 from 9.6% in FY22. The industry has recently witnessed the rollout of innovative banking models and has also focused on increasing the banking sector’s reach through various schemes.
The recent launch of the pilot project on central bank digital currency (CBDC) points towards the intent of RBI to further digitise the payments system. Technological innovations have led to marked improvements in efficiency, productivity, quality, inclusion and competitiveness in the extension of financial services, especially in the area of digital lending further enhancing India’s financial inclusion and fuelling the credit cycle in the country.
In this context, through our conscious efforts, we have consistently performed well during all the quarters of FY 23 and delivered strong business growth across all verticals. Our focus remains on growing our books responsibly while working towards digitisation across all our verticals.
Our total business stood at ₹ 1,40,806 Crore delivering a strong growth of 12%, compared to FY22. We reported our best-ever net profit at ₹ 1,106 Crore, up 64% y-o-y. We managed to achieve a 46 bps growth in our margins with NIM at 4.18%. The growth in NIM was achieved despite operating in a competitive price environment in liabilities.
As we followed a disciplined approach to reduce the stressed assets, NNPA declined by 156 bps to 0.74%. Our asset quality has significantly improved owing to lower slippages, higher recovery and an aggressive collection strategy. The provision coverage ratio stood at 92.14% and we remain well capitalised with a total CRAR of 18.56% providing us comfortable headroom for growth.
We have bolstered our branch and sales channels to enhance customer engagement and acquisition, resulting in expansion of our CASA deposit base and a further reduction in our cost of funds. Our retail advances experienced an impressive growth rate of 16%, driven by strong demand for home loans and mortgage loans. By implementing a direct lending strategy, actively participating in various government schemes, and introducing new products related to warehousing and commodities, our Agri portfolio has achieved growth of 18%, which is the highest among all the portfolios. In the Commercial segment, we achieved a growth of 15% and are undergoing a transformation by embracing digital lending, revamping our sales structure to target new business opportunities and decentralising credit processing.
Our digital systems are helping us to scale up our business volume with ease and better control. We continue to add new features to our customer onboarding app DLite, with the app recording 4.28 Million downloads. During FY 23, our digital transactions grew by 29% and the share of digital transactions stands at 95%.
Our UPI platforms saw a significant uptick with transactions growing from 1361 Lakhs to 1966 Lakhs during FY23, reflecting an increasing preference of our customers to transact digitally. Our diverse pre-approved digital loan services include personal loans with two-minute disbursement in the DLite app, credit cards and buy now pay later service through Amazon India.
Furthermore, we have recruited Chief Digital Officer from the market and are exploring other digital solutions which shall support our growth and enhance customer experience.
In an era of rapid technological advancements and evolving customer expectations, it is imperative to equip our workforce with the necessary skills and capabilities to navigate the ever-changing landscape. Our commitment to building a dynamic and future-ready workforce positions us to effectively respond to evolving market dynamics, deliver exceptional customer experiences, and drive sustainable growth in the years to come.
Our workforce remains highly motivated with each employee raking in a business of ₹ 18 Crore on average during FY 23. To better serve our customers, we have created a consumer banking vertical by merging personal banking liabilities and personal banking assets. A set of senior and experienced officers have already joined to head the CASA acquisition focusing on corporate salary accounts, government business, third-party products, etc. The structure is in line with large private sector banks having sizable CASA books.
We understand that our responsibilities extend beyond financial performance and encompass the impact we have on the environment, society, and all stakeholders. By integrating ESG considerations into our business practices, we strive to mitigate risks, seize opportunities, and enhance our overall resilience.
Environmental stewardship, such as power generation & consumption using wind turbines and waste management programs ensures a reduced environmental footprint and a greener future for generations to come. Social responsibility remains at the core of our actions as we actively contribute to the communities we serve. Through our CSR initiatives spanning education, sanitation and healthcare, we promote the welfare of nearby communities.
Additionally, robust governance practices, including transparency, ethical conduct, and strong risk management, instil trust and confidence among our stakeholders. Therefore, we have aligned our ESG policy with global practices of UN SDGs for measuring, monitoring and reporting.
By aligning our business with ESG principles, we position ourselves for sustainable growth and forge stronger relationships with all our stakeholders.
We remain steadfast in our pursuit of growth, driven by innovation, digital transformation, and a strong focus on ESG principles. With the dedication and resilience of our talented team and your continued support, we are confident in our ability to shape a prosperous future and deliver sustainable value for all.
On behalf of everyone at Karur Vysya Bank, we thank the Central and State Governments, Regulators, our Board members, employees, shareholders and other stakeholders for being an integral part of our momentous journey.
Regards,
Managing Director & CEO
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