The Karnataka Bank Limited has informed the Exchange regarding a press release dated August 12, 2025, titled "Press Release on Unaudited Financial Results for the quarter ended June 30, 2025".
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Awaiting price reaction for this filing.
Karnataka Bank reported a Q1 FY26 net profit of Rs. 292.40 crores, a sharp decline of about 27% from Rs. 400.33 crores in the same quarter last year. Margins came under significant pressure, with Net Interest Margin falling to 2.82% from 3.54%, Return on Assets dropping to 0.97% from 1.38%, and Return on Equity falling to 9.58% from 14.45%. On the positive side, asset quality improved, with Gross NPAs declining to 3.46% and Net NPAs falling to 1.44%. The bank's capital position strengthened, with the Capital Adequacy Ratio rising to 20.46% from 17.64%. Deposits grew 3.16% year-on-year, but gross advances slipped 1.57%, and operating profit stood at Rs. 467.29 crores.
The steep drop in profitability and compression in margins are likely to weigh negatively on the stock in the short term, despite the improvement in asset quality and a stronger capital base. Investors may react cautiously as the bank works to lift spreads and recover stressed assets.