Karnataka Bank has announced strong financial results for the second quarter of FY27, with a significant 37% year-on-year growth in net profit to INR435.89 crores. The bank demonstrated healthy expansion in its business segments, with total business growing by 17% year-on-year to INR2,07,132 crores. Advances saw a 25% increase, while deposits grew by 12%, underscoring the bank’s expanding operational footprint and customer trust.
| Key Financial Highlights (Q2 FY27) | Amount | YoY Growth |
| Net Profit | INR435.89 crores | 37% |
| Total Business | INR2,07,132 crores | 17% |
| Gross Advances | INR92,015 crores | 25% |
| Aggregate Deposits | INR1,15,117 crores | 12% |
| Net Interest Income (NII) | INR982.44 crores | 35% |
Strong Profitability and Business Growth
Karnataka Bank has reported a robust performance for the second quarter ended September 30, 2026. The bank’s net profit surged by 37% year-on-year to INR435.89 crores, compared to INR319.12 crores in the same quarter of the previous year. This growth was driven by a healthy increase in Net Interest Income (NII), which rose by 35% year-on-year to INR982.44 crores.
The bank’s total business, encompassing advances and deposits, reached an all-time high of INR2,07,132 crores as of September 30, 2026, marking a 17% year-on-year growth. Gross advances stood at INR92,015 crores, reflecting a substantial 25% year-on-year increase. Aggregate deposits also showed strong momentum, growing by 12% year-on-year to INR1,15,117 crores.
Asset Quality Improvement and Strategic Focus
Karnataka Bank continues to focus on improving its asset quality. The Gross NPA percentage as of September 30, 2026, stood at 2.27%, showing a significant improvement from 3.33% in September 2025. The Net NPA percentage also improved to 0.74% from 1.35% a year ago. The bank is actively working on reducing low-yield corporate exposure and replacing it with higher-yielding retail and MSME loans to drive margin expansion.
The bank is also prioritizing retail and MSME business lines, optimizing deposit costs, and strengthening its credit portfolio. Initiatives in digital transformation, including the launch of ‘Express Digi Gold Loan’, are aimed at enhancing customer reach and operational efficiency.
Future Outlook
Looking ahead, Karnataka Bank remains optimistic about its growth trajectory, focusing on accelerating retail expansion and stabilizing the corporate portfolio with high-quality assets. The bank anticipates continued improvement in its interest spreads and profitability in the coming quarters, supported by its ongoing digital initiatives and strategic focus on key growth segments.
Source: BSE
