Karnataka Bank has reported a quarterly net profit of Rs 3.19 billion for the quarter ended September 2025, marking a 9.1 per cent QoQ increase compared to Rs 2.92 billion in Q1 FY26. The Board of Directors approved the financial results for the quarter and half year at its meeting held in Mangaluru.

For the half year ended September 2025, the Bank recorded a net profit of Rs 6.11 billion, compared with Rs 7.36 billion reported during the same period last year.

In Q2 FY26, the Bank’s Net Interest Income (NII) stood at Rs 7.28 billion. Asset quality improved further, with Gross NPA reducing to 3.33 per cent (from 3.46 per cent in June 2025) and Net NPA declining to 1.35 per cent (from 1.44 per cent in June 2025).

The Bank’s aggregate business stood at Rs 1.76 trillion on a gross basis, compared with Rs 1.77 trillion in Q1 FY26. Aggregate deposits were Rs 1.02 trillion (vs. Rs 1.03 trillion in Q1), while Gross Advances stood at Rs 736 billion (vs. Rs 742 billion). Despite a marginal dip in advances, the Bank recorded growth in its RAM (Retail, Agriculture & MSME) portfolio. The Credit–Deposit Ratio stood at 71.63 per cent.

Karnataka Bank continued to maintain strong capital buffers, with a Capital Adequacy Ratio (CAR) of 20.84 per cent, up from 20.46 per cent as of June 2025. As per RBI’s revised draft guidelines, the Liquidity Coverage Ratio (LCR) as of 30 September 2025 stood at 188.16 per cent.

Announcing the results, Raghavendra S Bhat, Managing Director & CEO, said, “During the quarter, the Bank witnessed a marginal decline in topline performance but recorded further improvement in asset quality. Our focus will continue to remain on the RAM segments, while we strengthen our low-cost deposit base. These efforts will help improve spreads and enhance NII going forward.”