Karnataka Bank Ltd recorded a net profit of ₹319.12 crore during the second quarter of 2025-26 against a net profit of ₹336.07 crore in the corresponding period of 2024-25, registering a decline of 5.04 per cent.
However, the net profit improved by 9.1 per cent when compared to the first quarter of 2025-26. The bank had registered a net profit of ₹292.40 crore during Q1 2025-26.
The board of directors of the bank, which met in Mangaluru on Saturday, approved the financial results for the quarter and the half year ended September 30, 2025.
The net profit stood at ₹611.52 crore for the half year ended September 2025 as against ₹736.40 crore for H1 2024.
The net interest income (NII) of the bank stood at ₹728.12 crore during the second quarter of 2025-26 (₹833.56 crore in Q2 2024-25), and other income at ₹343.37 crore (₹269.92 crore). The net interest margin of the bank declined to 2.72 per cent in Q2 2025-26 (3.23 per cent).
While the gross NPA (non-performing assets) of the bank increased to 3.33 per cent during the second quarter of 2025-26 from 3.21 per cent in the corresponding quarter of the previous fiscal, the net NPA declined to 1.35 per cent during Q2 2025-26 from 1.46 per cent in Q2 2024-25.
Raghavendra S Bhat, Managing Director and Chief Executive Officer of the bank, said: “During the quarter, the bank witnessed a marginal quarter-on-quarter decline in topline performance but achieved improvement in asset quality. Our focus will continue to remain on the RAM (retail, agri and MSME) segments, alongside strengthening our base of low-cost deposits. These efforts are expected to enhance spreads and, in turn, improve NII.”
He said the bank is also actively working to build a high-quality credit portfolio with initiatives across all levels aimed at minimising slippages and recovering NPAs.
The Analytical Centre of Excellence (ACoE) of the bank has been instrumental in driving data-led transformation through the implementation of tools such as Retail Loan Propensity, Micro Market Analysis, Deposit Propensity, Primary Bank Index, Collection Prioritization, and Behaviour Scorecard. “These tools have been integrated into our business processes, embedding analytics into decision-making and supporting predictive and strategic analytics use cases to enhance efficiency and insight across the bank,” he said, adding, “Our mission and vision remain clear and steadfast as we continue to pursue our objectives with renewed focus and energy.”
The aggregate business of the bank stood at ₹1,76,461.34 crore (on a gross basis) for Q2 2025-26 compared to ₹1,75,196.93 crore in Q2 2024-25. The aggregate deposits of the bank stood at ₹1,02,817.19 crore in Q2 2025-26 (₹99,880.84 crore in Q2 2024-25), and gross advances stood at ₹73,644.15 crore (₹75,316.09 crore). The CD ratio (gross) of the bank stood at 71.63 per cent.
The bank’s capital adequacy ratio stood at 20.84 per cent in Q2 2025-26 (17.58 per cent).
In line with RBI’s revised draft guidelines on Liquidity Coverage Ratio, the bank has computed the same as on September 30 2025, which stands at 188.16 per cent, he said.
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Published on November 8, 2025
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