Shares of Karnataka Bank fell 4.89% to Rs 129.40 in morning trade on April 3 after the privately held lender posted lacklustre provisional data for the March quarter.

The bank’s gross advances rose 6.16% to Rs 61,326.42 crore for the three months to March 2023, compared to Rs 57,769.34 crore a year earlier, the bank said in a regulatory filing dated April 1.

Low-cost current and savings account (CASA) deposits rose 8.71% to Rs 28,807.04 crore from Rs 26,499.59 crore in the corresponding period of the previous fiscal.

Likewise, total deposits increased by 8.69% to Rs 87,362.56 crore from Rs 80,380.81 crore in Q4FY22 and Rs 84,592.65 crore in the quarter that ended December 31, 2022.

CASA as a percentage of total deposits was 32.97%, flat year-over-year and slightly higher than 31.91% for the quarter ending December 2022.

Shares of Bank of Karnataka are down about 16% year-to-date, underperforming Bank Nifty (down 5.5%), but on a 1-year basis, the stock has soared 111%.

The Mangaluru-based lender more than doubled its net profit to Rs 300.68 crore in Q3FY23, compared to Rs 146.57 crore a year earlier.

Operating profit increased by 49.27%, and net interest income increased by 34.07%.

In a recent report, Axis Securities gave Karnataka Bank a ‘buy’ rating based on its loan growth momentum and improving asset quality.

“The bank’s GNPA and NNPA have improved significantly from the levels seen a few quarters ago, slippage is expected to moderate going forward, and we believe the bank’s asset quality will continue to improve,” the report said, referring to gross non-performing assets and net non-performing assets.

The stock has a target price of Rs 170.