Karnataka Bank Reports Q2 Net Profit of ₹319.1 Crore

Karnataka Bank, based in Mangaluru, has announced a quarterly net profit of ₹319.1 crore for the period ending September 30, 2025. This figure represents a 9.1% increase compared to the previous quarter's profit of ₹292.4 crore.

During a board meeting held on Saturday, the directors approved the financial results for both the quarter and the half-year period ending in September. For the first half of the financial year, the bank reported a net profit of ₹611.5 crore, down from ₹736.4 crore in the corresponding period last year.

In terms of financial performance for the quarter, the bank's Net Interest Income (NII) was recorded at ₹728.1 crore. Additionally, the bank has shown improvements in its asset quality, with Gross Non-Performing Assets (GNPAs) decreasing to 3.3%, down from 3.4% in the previous quarter. Net Non-Performing Assets (NNPAs) also improved, reducing to 1.3% from 1.4%.

The bank's total business stood at ₹1,76,461.3 crore for the second quarter of FY26, a slight decline from ₹1,77,509.1 crore in the first quarter. Aggregate deposits were reported at ₹1,02,817.19 crore, down from ₹1,03,242.1 crore, while gross advances decreased to ₹73,644.1 crore from ₹74,267 crore in the prior quarter. However, the bank noted growth in its Retail, Agriculture, and Micro, Small and Medium Enterprises (MSME) segments. The bank's Credit-Deposit (CD) ratio was reported at 71.6%.

The Capital Adequacy Ratio for the bank improved to 20.8%, compared to 20.4% in June. In compliance with the Reserve Bank of India's updated guidelines on Liquidity Coverage Ratio (LCR), the bank calculated this figure as 188.1% as of September 30.

Raghavendra S. Bhat, Managing Director and Chief Executive Officer of Karnataka Bank, commented on the results, stating, "During the quarter, the bank witnessed a marginal quarter-on-quarter decline in topline performance but achieved improvement in asset quality. The bank is also actively working to build a high-quality credit portfolio, with initiatives across all levels aimed at minimising slippages and recovering Non-Performing Assets. Additionally, our Analytical Centre of Excellence has been instrumental in driving data-led transformation through the implementation of various analytical tools."

Karnataka Bank's focus on enhancing asset quality and maintaining a robust credit portfolio reflects its strategic direction in navigating the challenges faced in the current economic climate. This performance is being closely monitored by investors and analysts alike, as the bank seeks to strengthen its position in the competitive banking sector.