Shares of Karnataka Bank fell by around 1 percent to Rs 170 apiece on August 13 after the lender posted a weak set of numbers for the June quarter (Q1 FY26).
So far this year, the stock of this lender has declined 19 percent, underperforming benchmark Nifty 50's 2 percent rise.
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The private sector bank’s net profit for Q1 FY26 dropped 27 percent year-on-year to Rs 292 crore. Net interest income (NII) fell 16.4 percent to Rs 755 crore from Rs 903 crore in the same quarter last year.
The bank’s net interest margin slipped to 2.82 percent from 3.54 percent a year earlier.
Asset quality weakened as gross non-performing assets (GNPA) rose to 3.46 percent in the June quarter from 3.08 percent in the March quarter. Net NPA also increased to 1.44 percent from 1.31 percent sequentially.
Provisions and contingencies jumped to Rs 111 crore from Rs 40 crore in the year-ago period. The Provision Coverage Ratio, however, improved to 81.11 percent as of June 30, 2025, from 77.97 percent a year earlier.
The bank’s operating profit stood at Rs 467.29 crore for the quarter. Capital adequacy ratio improved to 20.46 percent at the end of Q1 FY26, compared to 17.64 percent in the same quarter last year.
Aggregate deposits increased 3.16 percent to Rs 1.3 lakh crore from Rs 1 lakh crore a year ago. However, gross advances fell to Rs 74,267.02 crore from Rs 75,455.01 crore in the year-ago period.
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