Karnataka Bank reported a 40% quarter-on-quarter increase in net profit to ₹408.19 crore for Q4 FY26, driven by improved net interest margins and a sharp reduction in slippages. The bank achieved its highest-ever aggregate business of ₹192,118 crores as of March 31, 2026, reflecting a 5.12% QoQ growth. Karnataka Bank delivered on its guidance for key financial ratios, including net interest margin (NIM) and asset quality, underscoring the effectiveness of its strategic focus on retail, agri, and MSME (RAM) segments.

Business Performance and Guidance

The bank’s total business of ₹192,118 crores exceeded its guidance of ₹192,000 crores. Gross advances stood at ₹83,339.92 crores, slightly below the guided range of ₹84,000 crores to ₹85,000 crores, while deposits reached ₹108,778.75 crores against a guidance of ₹108,000 crores. The CASA ratio improved to 33.61%, surpassing the guidance of 32% to 32.5%.

Asset Quality and Provisions

Asset quality showed marked improvement during the quarter. Gross NPA declined to 2.78% from 3.32% in December 2025, a reduction of 54 basis points. Net NPA stood at 0.98%, an improvement of 33 basis points QoQ. Slippages reduced significantly to 0.20% in Q4 FY26 from 0.47% in the previous quarter. The bank’s provision coverage ratio (PCR), excluding technically written-off accounts, increased to 65.39% from 61.23% in December 2025.

Financial Metrics

Net interest income (NII) for Q4 FY26 rose 6% QoQ to ₹843 crores, supported by a NIM of 3.07%, up from 2.92% in Q3 FY26. The cost of funds improved by 8 basis points to 5.38%. The bank recorded a full-year net profit of ₹1,310.50 crores, a YoY growth of 3%. The cost-to-income ratio for Q4 stood at 50.47%, compared to 58.72% in the preceding quarter, while the full-year ratio was 56.34%.

Strategic Outlook

Management guided for overall business growth of around 15% in FY27, with deposit growth between 10% and 15% and advances growth of 15% to 20%. The bank aims to maintain a CASA ratio above 33% and a CD ratio of 80%. ROA guidance remains at 1% plus, while the cost-to-income ratio is targeted between 52% and 53%. The bank continues to focus on reducing reliance on high-cost bulk deposits and accelerating growth in the RAM segment.

Karnataka Bank announced the resignation of its Chief Human Resources Officer, Mr. Niranjkumar R, effective from the close of business hours on May 25, 2026. The resignation was submitted on personal grounds through a letter dated May 14, 2026, and follows the completion of all necessary internal formalities. Consequently, Mr. Niranjkumar R ceases to be a Senior Management Personnel of the bank.

The disclosure was made to the exchanges in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bank confirmed that the detailed reason for the resignation and a copy of the resignation letter were enclosed with the regulatory filing.

In his resignation letter addressed to the Managing Director & CEO, Mr. Niranjkumar R cited personal reasons for stepping down. He expressed gratitude to Karnataka Bank for the opportunity to drive key initiatives, most notably the 'Redesign of the Performance Management Framework', and expressed confidence that these systems would deliver long-term value.

The outgoing officer committed to ensuring a smooth handover of ongoing HR interventions to maintain stability, despite his request for an early relief due to personal circumstances. The bank has informed the stock exchanges regarding the change in its senior management composition.

The following table summarizes the key details of the change in senior management: