Karnataka Bank Reports 36.6% Rise in Q2 Net Profit at ₹435.89 Crore

Karnataka Bank Ltd (KBL) has released its financial performance for the second quarter of 2026-27, reporting a net profit of ₹435.89 crore. This marks a 36.59 per cent increase compared to the net profit of ₹319.12 crore recorded in the corresponding period of the previous fiscal year.

The financial results were approved during a meeting of the bank's Board of Directors held in Mangaluru on Wednesday. For the half-year ended September 2026, the bank's net profit stood at ₹854.84 crore, showing a 39.79 per cent growth compared to ₹611.52 crore for the half-year ended September 2025.

Total income for the quarter increased to ₹2,793.96 crore, up from ₹2,522.55 crore in Q2FY26. Interest income also saw an increase, rising to ₹982.44 crore from ₹728.12 crore in the same period last year.

Raghavendra S Bhat, Managing Director and CEO of Karnataka Bank, stated that the bank reached a historic milestone as its aggregate business climbed to a record ₹2,07,132.41 crore. Bhat noted that the RAM (Retail, Agriculture, and MSME) segment expanded by 19 per cent year-on-year, growing from ₹47,958.40 crore on September 30, 2025, to ₹56,968.79 crore by September 30, 2026.

The bank's asset quality showed improvements, driven by disciplined underwriting, recovery strategies, and credit portfolio monitoring. Gross non-performing assets (NPA) reduced by 106 basis points year-on-year to 2.27 per cent, while net NPA lowered by 61 basis points to 0.74 per cent.

Aggregate deposits stood at ₹1.15 lakh crore as of September 30, 2026, registering a 12 per cent year-on-year growth from ₹1.02 lakh crore. Retail term deposits reached ₹72,197.32 crore compared to ₹65,531.80 crore previously, marking a 10 per cent increase. The current account savings account (CASA) ratio increased to 31.80 per cent from 31.01 per cent in Q2FY26.

Gross advances stood at ₹92,015.26 crore, reflecting a 25 per cent year-on-year growth compared to ₹73,644.14 crore on September 30, 2025. Additionally, the net interest margin improved by 45 basis points year-on-year, moving from 2.72 per cent to 3.17 per cent for the quarter ended September 30, 2026.

Biji SS, Executive Director of the bank, stated that the institution will continue to focus on balanced expansion, execution proficiency, and client care moving forward.

"Karnataka Bank's Q2 results highlight the importance of disciplined credit portfolio monitoring and robust recovery strategies in the traditional banking sector. By expanding its RAM segment by 19 per cent and simultaneously reducing gross NPAs by 106 basis points, the bank demonstrates that steady, compliance-driven growth can go hand in hand with asset quality improvement. This financial performance reflects strong fundamental oversight, which serves as a positive indicator for regional banking stability and credit availability for MSMEs and retail borrowers." — Dr. Shishir Gupta, Founder & CEO, StartupLanes