The Karnataka Bank (KTKBANK) Q2 25/26 earnings summary

Executive summary

• Q2 FY 2026 marked the first full quarter under new leadership, emphasizing disciplined growth, operational excellence, and strategic execution aligned with long-term goals.

• Achieved 9.1% QoQ growth in PAT to ₹319 crore in Q2 FY26, with improved asset quality and stable deposit base.

• Digital initiatives and product revamps enhanced customer engagement and operational efficiency.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, were approved by the Board and reviewed by statutory auditors with an unmodified opinion.

• No deviation or variation in the utilization of funds raised; all proceeds from previous capital instruments fully utilized for intended purposes.

Financial highlights

• Standalone net profit for Q2 FY26 was ₹319.12 crore, up 9.1% QoQ but down YoY from ₹336.07 crore; H1 FY26 net profit was ₹611.52 crore, down from ₹736.40 crore in H1 FY25.

• Net interest income (NII) was ₹728 crore, down 3.6% QoQ and YoY; net interest margin (NIM) declined to 2.72% from 2.82% in Q1 FY26.

• Gross advances at ₹73,644 crore, down 0.8% QoQ; RAM segment grew by 4% YoY, while corporate advances declined by 12%.

• CASA ratio improved to 31.01% from 30.84% sequentially.

• Operating profit before provisions for H1 FY26 stood at ₹907.33 crore (standalone); provisions sharply reduced by 81.9% QoQ.

Outlook and guidance

• Management targets a CD ratio of 80%, NIM above 3%, ROA above 1%, and cost-to-income ratio between 53–56%.

• Yield on advances expected to recover to above 9% in H2 FY 2026.

• Focus remains on RAM segment growth, CASA buildup, and cost control.

• Recovery efforts on restructured and technically written-off accounts are ongoing, with expectations for further reduction in stress assets.

• Consolidation of financial position to enhance stakeholder value and ROE.