The Karnataka Bank (KTKBANK) Q2 26/27 earnings summary

Executive summary

• Aggregate business reached ₹207,132 crore, up 17% YoY; Q2 PAT was ₹435.89 crore, up 36.59% YoY, and H1 standalone net profit was ₹854.84 crore.

• GNPA improved to 2.27% and NNPA to 0.74%; advances grew 25% YoY and deposits 12%.

Financial highlights

• Q2 NII was ₹982.44 crore, up 34.93% YoY; interest income rose 14.90% to ₹2,503.87 crore and interest expense rose 4.85% to ₹1,521.43 crore.

• Operating profit increased 36.86% YoY to ₹602.22 crore; PBT rose to ₹587.48 crore from ₹419.97 crore.

• Standalone Q2 total income was ₹2,793.96 crore versus ₹2,522.55 crore; H1 total income was ₹5,532.03 crore versus ₹5,142.19 crore.

• Other income declined 15.52% YoY to ₹290.09 crore; operating expenses rose 6.15% to ₹670.31 crore and provisions declined 26.59% to ₹14.74 crore.

• Consolidated Q2 net profit was ₹435.86 crore versus ₹319.22 crore; H1 net profit was ₹854.99 crore versus ₹611.72 crore.

Outlook and guidance

• FY27 advance growth target is 15%-20%, with average business growth targeted at 15%; management expects stronger progress in Q3 and Q4 than in H1.

• Guidance includes NIM of 3%-3.4%, ROA of 1.1%-1.35%, cost-to-income of 51%-52%, and liability growth of 10%-15%.

• Planned business addition for FY27 is ₹33,000 crore, with ₹15,000 crore added in H1; management expects deferred Q2 recoveries in Q3 and further GNPA and NNPA improvement.

• CASA target is ~34% and CD ratio target 79%-80%; strategy emphasizes stable funding, optimized mix, asset quality and expense management.

• Product pipeline includes housing-loan limit enhancements, surrogate-based housing and mortgage lending, digital vehicle-loan documentation, marketplace fixed deposits and digitized MSME products.