Net interest income (NII) for the quarter was at Rs 792.06 crore, down 0.09% from Rs 792.78 crore posted in Q3 FY25. Net interest margin (NIM) reduced to 2.92% in Q3 FY26 compared with 3.02% reported in the corresponding quarter of the previous year.
The bank's provisions (other than tax) and contingencies surged 13.24% to Rs 94.86 crore in Q3 FY26 as against Rs 83.77 crore in Q3 FY25.
Operating profit was at Rs 451.80 crore in Q3 FY26, up 4.32% from Rs 433.07 crore in Q3 FY25.
As of 31 December 2025, the bank’s aggregate business (gross) reached Rs 1,81,394.37 crore, reflecting a modest 1.97% YoY growth. Deposits rose 4.08% YoY to Rs 1,04,111.52 crore, while gross advances slipped 0.74% YoY to Rs 77,282.85 crore.
The ratio of gross NPAs was at 3.32% as of 31 December 2025, compared to 3.11% as of 31 December 2024. The ratio of net NPAs was at 1.31% as of 31 December 2025, compared to 1.39% as of 31 December 2024.
Provision coverage ratio (PCR) increased by 26 bps to 80.90% as of 31 December 2025 from 80.64% as of 31 December 2024.
The Capital Adequacy Ratio of the bank improved to 19.94% in Q3 FY26 compared to 17.64% in Q3 FY25. In line with RBI’s revised draft guidelines, the liquidity coverage ratio as of December 31, 2025, stood at 186.84%.
Raghavendra S. Bhat, managing director & CEO of the Karnataka Bank, said, “We reiterate that our focus on the RAM (retail, agri, and MSME) segments and pursuing a strong base in low-cost deposits has started accruing benefits for the bank. As the bank has energized the distribution ecosystem by building rigor into the processes, the accretion of a high-quality credit portfolio is now visible. In parallel, digital transformation initiatives are gaining traction, with the development of new products and platforms to enhance customer experience and improve operational efficiency.
Various analytical tools have now been embedded into core business processes, enabling analytics-driven decision-making and supporting predictive and strategic use cases to drive efficiency and deeper insights across the bank, he said, adding, “Our mission and vision remain firmly anchored as we advance our objectives with renewed clarity and momentum.”
Karnataka Bank provides a wide range of banking and financial services, including retail and corporate banking and para-banking activities, as well as treasury and foreign exchange operations.
Shares of Karnataka Bank fell 0.90% to Rs 203.75 on the BSE.