Mumbai, August 13, 2025 – Karnataka Bank share price fell nearly 1% to ₹170 on Wednesday after the lender reported a weaker-than-expected performance for the first quarter of FY26, alongside signs of deterioration in asset quality.
Market Performance
- Karnataka Bank share price has declined 19% year-to-date, underperforming the benchmark Nifty 50’s 2% rise.
- The latest dip follows subdued earnings and higher provisions.
Revenue & Profit Decline
- Net Profit: ₹292 crore in Q1 FY26, down 27% year-on-year.
- Net Interest Income (NII): ₹755 crore, a 16.4% drop from ₹903 crore in Q1 FY25.
- Net Interest Margin (NIM): Fell to 2.82% from 3.54% last year.
Asset Quality Deterioration
- Gross NPA: Rose to 3.46% in Q1 FY26 from 3.08% in Q4 FY25.
- Net NPA: Increased to 1.44% from 1.31% sequentially.
- Provisions & Contingencies: Jumped to ₹111 crore from ₹40 crore a year ago.
- Provision Coverage Ratio (PCR): Improved to 81.11% from 77.97% last year.
Operational & Capital Metrics
- Operating Profit: ₹467.29 crore in Q1 FY26.
- Capital Adequacy Ratio: Strengthened to 20.46% from 17.64% in Q1 FY25.
Business Highlights
- Aggregate Deposits: Up 3.16% to ₹1.3 lakh crore from ₹1 lakh crore last year.
- Gross Advances: Declined to ₹74,267.02 crore from ₹75,455.01 crore year-on-year.
Summary
The decline in Karnataka Bank share price reflects investor concerns over falling profitability, narrowing margins, and weakening asset quality. While capital adequacy has improved, the bank faces challenges in loan growth and maintaining asset quality in the coming quarters.
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