Karnataka Bank reports Q2FY26 net profit of ₹319.12 crore, up 9.1% QoQ, with improved asset quality
Karnataka Bank reported a Q2FY26 net profit of ₹319.12 crore, a 9.1% QoQ increase, with improved asset quality and Capital Adequacy Ratio. The bank focuses on RAM segments and credit quality.
The positive QoQ growth in net profit and improved asset quality are favorable. However, the half-yearly net profit and Net Interest Income (NII) showed a year-on-year decline, suggesting mixed financial performance which tempers the overall positive impact.
The bank reported a 9.1% QoQ increase in net profit for Q2FY26 and demonstrated improved asset quality with reduced Gross and Net NPAs. The Capital Adequacy Ratio also strengthened, and management expressed confidence in strategic initiatives for future growth.
* Karnataka Bank posted a net profit of ₹319.12 crore for the quarter ended September 2025 (Q2FY26). * This represents a 9.1% quarter-on-quarter (QoQ) increase compared to ₹292.40 crore in the quarter ended June 2025. * For the half year ended September 2025, the net profit stood at ₹611.52 crore, against ₹736.40 crore for the half year ended September 2024. * The Net Interest Income for Q2FY26 was ₹728.12 crore. * Asset quality improved, with Gross NPAs reducing to 3.33% from 3.46% in June 2025, and Net NPAs reducing to 1.35% from 1.44%. * The aggregate business (gross) was ₹1,76,461.34 crore for Q2FY26, with deposits at ₹1,02,817.19 crore and gross advances at ₹73,644.15 crore. The RAM (Retail, Agri & MSME) segment showed growth. * The Bank's Capital Adequacy Ratio improved to 20.84% from 20.46% as of June 2025. * The Liquidity Coverage Ratio (LCR) stood at 188.16% as on September 30, 2025. * Shri Raghavendra S. Bhat, Managing Director & CEO, stated that despite a marginal QoQ decline in topline, the Bank achieved asset quality improvement. He highlighted the continued focus on RAM segments and strengthening low-cost deposits to enhance spreads and NII. The Bank is also actively building a high-quality credit portfolio and leveraging its Analytical Centre of Excellence (ACoE) for data-led transformation and enhanced decision-making.
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