Karnataka Bank [NSE: KTKBANK], a prominent player in India’s banking sector, announced its Q1 FY26 results on Tuesday, August 12, 2025. The results revealed a challenging start to the fiscal year, with a sharp drop in profitability and a decline in net interest income. Investors tracking the Karnataka Bank share price will note the muted market reaction to these results, while those following the banking sector may see it as a reflection of trends in banking sector stocks.
For Q1 FY26, the bank posted a net profit of ₹292.50 crore, marking a 27% year-on-year decline from ₹400.43 crore in the same quarter last year. Net interest income (NII) fell 16.4%, coming in at ₹755 crore compared to ₹903 crore in Q1 FY25.
Key Financial Results for Karnataka Bank Q1 FY26
| Particulars | Q1 FY26 | Q4 FY25 | Q1 FY25 | YoY Growth (%) | QoQ Growth (%) |
| Total Income (Cr) | 2,619.7 | 2,686.7 | 2,557.0 | 2.4 | -2.5 |
| Net profit (Cr) | 292.5 | 252.6 | 400.4 | -27.0 | 15.8 |
| Operating Profit (Cr) | 467.4 | 375.3 | 558.7 | -16.3 | 24.5 |
| Basic EPS (₹) | 7.7 | 6.7 | 10.6 | -27.1 | 15.9 |
| Diluted EPS (₹) | 7.7 | 6.7 | 10.6 | -27.0 | 15.8 |
Important Updates from Karnataka Bank’s Latest Financial Results
- Profitability Under Pressure
Karnataka Bank reported a 27% YoY fall in net profit to ₹292.50 crore in Q1 FY26 from ₹400.43 crore a year ago. The drop was largely due to the decline in net interest income and rising provisions.
- Net Interest Income Decline
NII fell 16.4% to ₹755 crore from ₹903 crore in Q1 FY25, reflecting lower spreads and changes in the loan book composition.
- Rising NPAs
Gross non-performing assets (GNPA) increased to 3.46% in Q1 FY26 from 3.08% in Q4 FY25. Net NPA rose to 1.44% from 1.31% sequentially, highlighting asset quality pressures.
- Business Growth
Aggregate business stood at ₹1,77,509.19 crore in Q1 FY26, up 1.12% YoY. Aggregate deposits rose 3.16% to ₹1,03,242.17 crore, while gross advances were ₹74,267.02 crore, slightly down from ₹75,455.01 crore a year ago.
- Strong Capital Adequacy
The capital adequacy ratio improved to 20.46% at the end of Q1 FY26 from 17.64% last year, indicating a healthy capital buffer.
- Share Market Reaction
The results were announced post-market hours. On August 12, 2025, shares of Karnataka Bank closed marginally higher at ₹172.30 on the BSE.
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