The Karnataka Bank (KTKBANK) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 marked a period of leadership transition, digital transformation, and renewed focus on disciplined growth, operational excellence, and strategic execution.

• Achieved 3.2% YoY growth in total deposits and 5.1% growth in retail, agri, and MSME advances.

• PAT rose 15.86% sequentially to ₹292.4 crore, though down YoY due to a one-time tax refund in Q1 FY25.

• Focused on product innovation, digital expansion, and strengthening collections and asset quality.

• Unaudited standalone and consolidated financial results for Q1 FY26 were approved by the Board and reviewed by statutory auditors with an unmodified opinion.

Financial highlights

• Aggregate business stood at INR 177,509 crore, up 1.1% YoY; gross advances at INR 74,267 crore, down 1.6% YoY; aggregate deposits at INR 103,242 crore, up 3.16% YoY.

• Net interest income (NII) at INR 755.60 crore, down 16.36% YoY and 3.21% QoQ; NIM at 2.82%.

• Standalone net profit after tax for Q1 FY26 was ₹292.40 crore, up from ₹252.37 crore in Q4 FY25 and down from ₹400.33 crore in Q1 FY25.

• CASA deposits grew 4.28% YoY, now 30.84% of total deposits.

• Cost to income ratio improved to 58.05% from 68.98% QoQ; operating profit up 24.6% sequentially.

Outlook and guidance

• Targeting overall advances growth to INR 85,000–89,000 crore by year-end, with RAM segment expected to grow by INR 7,000–8,000 crore.

• NIM expected to improve by 10 bps by year-end, aiming for 3%.

• Focus on consolidating financial position, cost control, CASA growth, and quality advances.

• Targeting CASA at 30–32%, NIM at 3–3.3%, NNPA at 1–1.2%, cost-to-income at 53–56%, and ROA at 1.1–1.2%.

• No new Basel III compliant unsecured debt instruments were raised during the quarter; focus remains on capital adequacy and prudent capital management.