KASB Bank boasts decent gross spreads and an even better CASA among peers (small banks). Yet it is struggling on the profitability front. KASBs shrinking deposit size is a matter of concern limiting its ability to have more earning assets at its disposal. As per the latest available numbers, the investments and advances are both evenly distributed between the earning assets.
A gradual increase in return on deposits has also played negatively on the NII. It is the quality of advances that is a major cause of worry for KASB as evident by massive increase in provisioning charge for 9M CY13. NPLs stood at Rs11.9 billion as at June end 2013, which makes up for a very high infection ratio; in excess of 40 percent.
There was not much good news on the non-mark-up front either as the foreign currency income and fee and commission income squeezed considerably. Although, KASB has managed to keep its non-mark-up expenses in check, the top line is too thin to accommodate such huge non-mark-up expenses-resulting in after tax losses.
KASBs fortunes will depend a lot on the banks drive to work on its highly infected advances portfolio. Moreover, the deposit mobilisation team of KASB has a lot of ground to cover to arrest the decline in deposits.


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KASB BANK LIMITED (CONSOLIDATED P&L)
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Rs (mn) 3QCY13 QoQ chg 9MCY13 YoY chg
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Markup Earned 1030 -15% 3830 -23%
Markup Expenses (602) -11% (2140) -30%
Net Markup Income 428 -20% 1690 -11%
Provisioning/(Reveral) (186) -19% (900) 22%
Net Markup Income after provisions 242 -20% 790 -33%
Non Mark-up/Interest Income 243 23% 591 -42%
Operating Revenues 486 -3% 1382 -37%
Non Mark-up/Interest Expenses (639) -1% (1878) 2%
Profit Before Taxation (153) 6% (496)
Taxation (6) -114% 74 -148%
Profit After Taxation (159) 54% (422)
EPS (Rs.) -0.08 -0.22
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Source: KSE Notice
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