Karnataka Bank Limited (KTKBANK) has reported a significant 9.1% quarter-on-quarter (QoQ) growth in net profit for the second quarter of the financial year 2026 (Q2 FY26).
The Bank announced an impressive quarterly Net Profit of Rs. 319.12 Crore for the quarter ended September 2025. This marks an improvement from the Rs. 292.40 Crore net profit recorded in the quarter ended June 2025.
The financial results were approved by the Board of Directors during a meeting held today in Mangaluru.
Despite the strong QoQ jump, the Q2 FY26 net profit of Rs. 319.12 Crore saw a year-on-year decline of 5.04% compared to Rs. 336.07 Crore posted in the quarter ended September 2024.
For the half year ended September 2025, the net profit stood at Rs. 611.52 crores, which represents a decline compared to Rs. 736.40 crores recorded during the same period last year.
Asset Quality and Capital Health Stabilize
A key highlight of the Q2 results was the continued moderation of Non-Performing Assets (NPAs). The Gross Non-Performing Assets (GNPAs) reduced to 3.33% as of September 2025, down from 3.46% reported in June 2025.
Similarly, Net Non-Performing Assets (NNPAs) also saw a reduction, dropping to 1.35% from 1.44% in the previous quarter.
The Bank also demonstrated robust capital management, with the Capital Adequacy Ratio (CAR) improving to 20.84% in Q2 FY26, up from 20.46% as of June 2025. Furthermore, the Liquidity Coverage Ratio (LCR), computed as per RBI’s revised draft guidelines, stood strong at 188.16% as of 30th September 2025.
Net Interest Income (NII) for the quarter ending September 2025 was reported at Rs. 728.12 Crore.
Commenting on the performance, Shri Raghavendra S. Bhat, Managing Director & CEO, stated that while the Bank witnessed a marginal QoQ decline in topline performance, it successfully achieved an improvement in asset quality.
Shri Bhat emphasized the Karnataka Bank’s future strategy, stating that the focus will “continue to remain on the RAM (Retail, Agri, and MSME) segments”. Strategic efforts are also underway to strengthen the base of low-cost deposits. These initiatives are expected to enhance spreads and subsequently improve the Net Interest Income (NII).
The Karnataka Bank is actively working on building a high-quality credit portfolio and is implementing initiatives at all levels to minimise slippages and boost the recovery of Non-Performing Assets.
Furthermore, Karnataka Bank’s Analytical Centre of Excellence (ACoE) is driving data-led transformation through the integration of analytical tools like Deposit Propensity, Retail Loan Propensity, and Collection Prioritization into core business processes, thereby embedding analytics into decision-making.
This press communique, enclosing a copy of the results, was filed with regulatory bodies including the National Stock Exchange of India Limited and BSE Limited.
The disclosure was signed by Sham K, Company Secretary & Compliance Officer, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Disclaimer: The information provided is for educational purposes only and does not constitute financial advice. We are not registered financial advisors. Please conduct your own research and consult a qualified advisor before making investment decisions. Any investment decisions you make based on this information are solely at your own risk.
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