Karnataka Bank Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Karnataka Bank Ltd filed with BSE on 06 Aug 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Karnataka Bank reported Q1 FY27 net profit of Rs 418.95 crore, up 3% quarter-on-quarter and 43% year-on-year, with net interest margin improving to 3.20% from 3.07% in Q4 FY26. Gross advances rose to Rs 86,610 crore and gross NPA improved to 2.58% from 2.78% in the previous quarter. Management discussed branch expansion plans, retail and MSME growth initiatives, and reductions in bulk deposits and IBPC exposure.
Numbers mentioned
Aggregate business: INR1,97,007 crores (as of June 30, 2026)
p. 4
“Bank has achieved its highest ever aggregate business, which stood at INR1,97,007 crores as of June 30, 2026, up by 3% Q-o-Q from INR1,92,119 crores in March, 2026 and up by 11% Y-o-Y from INR1,77,509 crores in June, 2025.”
Raghavendra Bhat, page 4 of the filed PDF · View the filing
Gross Advances: INR86,610 crores (as on 30th June, 2026)
p. 4
“Gross Advances stood at INR86,610 crores as on 30th June, 2026, reflecting a Q-o-Q growth of 4% from INR83,340 crores as on 31st March, 2026 and a Y-o-Y growth of 17% from INR74,267 crores as on 30th June, 2025.”
Raghavendra Bhat, page 4 of the filed PDF · View the filing
Aggregate deposits: INR1,10,396 crores (as on 30th June, 2026)
p. 4
“Aggregate deposits as on 30th June, 2026 was INR1,10,396 crores, reflecting a Q-o-Q growth of 1% over 31st March, 2026 at INR1,08,779 crores and a Y-o-Y growth of 7% over 30th June, 2025 at INR1,03,242 crores.”
Raghavendra Bhat, page 4 of the filed PDF · View the filing
CASA ratio: 32.42% (June, 2026)
p. 4
“CASA ratio as on June, 2026 was 32.42% and 33.61% as on March, 2026 as against 30.84% as on June, 2025.”
Raghavendra Bhat, page 4 of the filed PDF · View the filing
Net interest income: INR938.29 crores (Q1 FY27)
p. 5
“Net interest income Q1 FY27 stood at INR938.29 crores as compared to INR842.95 crores in Q4 FY26, registering a Q-o-Q growth of 11%.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Net interest margin: 3.20% (Q1 FY27)
p. 5
“Net interest margin stood at 3.20% for Q1 FY27 vis-a-vis against 3.07% in Q4 FY26 and 2.82% in Q1 FY26.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Yield on advances: 8.68% (Q1 FY27)
p. 5
“Yield on advances for Q1 FY27 stood at 8.68% as compared to 8.78% in Q4 FY26, recording a 10 basis points decrease.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Cost of funds: 5.16% (Q1 FY27)
p. 5
“Cost of funds stood at 5.16% for Q1 FY27 as compared to 5.38% for Q4 FY26, registering a 22 basis points improvement.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Profit After Tax: INR418.95 crores (Q1 FY27)
p. 5
“Profit After Tax for Q1 FY27 was INR418.95 crores as against INR408.19 crores in Q4 FY26 with Q-o-Q increase of 3%.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Gross NPA: 2.58% (as on 30th June, 2026)
p. 5
“Gross NPA as on 30th June, 2026 stood at 2.58% as against 2.78% in March, 2026, thereby showing an improvement of 20 basis points.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Net NPA: 0.87% (as on 30th June, 2026)
p. 5
“Net NPA percentage as on 30th June, 2026 stood at 0.87% as against 0.98% in March, 2026, demonstrating 11 basis points Q-o-Q improvement.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Credit cost: 0.03% (Q1 FY27)
p. 5
“Credit cost stood at 0.03% in Q1 FY27 against 0.10% in Q4 FY26.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
PCR (excluding technically written-off accounts): 67.03% (as of June, 2026)
p. 5
“PCR, excluding technically written-off accounts, presently stands at 67.03% as of June, 2026 as against 65.39% as of March, 2026.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
Cost to income ratio: 55.14% (quarter ended 30th June, 2026)
p. 6
“For the quarter ended 30th June, 2026, cost-to-income ratio stood at 55.14% as against 50.47% for the quarter ended 31st March, 2026 and 58.05% for the quarter ended 30th June, 2025.”
Raghavendra Bhat, page 6 of the filed PDF · View the filing
Return on Equity: 12.48% (Q1 FY27)
p. 6
“Return on Equity: Q1 FY27 return on equity stood at 12.48% as against 12.69% in Q4 FY26 v/s 9.58% in Q1 FY26.”
Raghavendra Bhat, page 6 of the filed PDF · View the filing
Return on Assets: 1.29% (Q1 FY27)
p. 6
“Return on Assets: Q1 FY27 ROA stood at 1.29% as against 1.27% in Q4 FY26 and 0.97% in Q1 FY26.”
Raghavendra Bhat, page 6 of the filed PDF · View the filing
Liquidity Coverage Ratio: 169% (as on 30th June, 2026)
p. 6
“As on 30th June, 2026, LCR stood at 169% against 165.30% as of 31st March, 2026 and as against the statutory target of 100%.”
Raghavendra Bhat, page 6 of the filed PDF · View the filing
CRAR: 21.10% (as on 30th June, 2026)
p. 6
“CRAR was at 21.10% as on 30th June, 2026 in comparison to 20.07% as on 31st March, 2026.”
Raghavendra Bhat, page 6 of the filed PDF · View the filing
CD ratio: 78.45% (as on June, 2026)
p. 5
“CD ratio as on June, 2026 stood at 78.45% as compared to 76.61% as on March, 2026 and 71.93% in June, 2025.”
Raghavendra Bhat, page 5 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Business growth — around 15% overall growth
stated firmly by Raghavendra Bhat
p. 7
“we keep by and large, 15% growth in the business.”
Raghavendra Bhat, page 7 of the filed PDF · View the filing
Liabilities growth — 10% to 15%
stated as an aspiration by Raghavendra Bhat
p. 7
“around 10% to 15% growth in liabilities and 15% to 20% growth in advances.”
Raghavendra Bhat, page 7 of the filed PDF · View the filing
Branch network expansion — 31 to 32 branches · current financial year, remaining branches before end of H1
stated firmly by Raghavendra Bhat
p. 7
“we have plans for opening around 31 to 32 branches during the current financial year. One branch we have already opened. Remaining 12 to 13 branches, we have plans to open before the end of H1.”
Raghavendra Bhat, page 7 of the filed PDF · View the filing
Return on Assets — 1.35% to 1.40%
stated as an aspiration by Raghavendra Bhat
p. 12
“Going forward, I will tell you since it is already 1.29%, I am aiming 1.35% to 1.40%.”
Raghavendra Bhat, page 12 of the filed PDF · View the filing
Net interest margin
stated firmly by Raghavendra Bhat
p. 11
“And further improvement has happened in this quarter and it will continue to improve. That much assurance I will give you.”
Raghavendra Bhat, page 11 of the filed PDF · View the filing
CD ratio
stated firmly by Raghavendra Bhat
p. 9
“And going forward also, we continue to improve the ratio.”
Raghavendra Bhat, page 9 of the filed PDF · View the filing
Bulk advances percentage
stated firmly by Raghavendra Bhat
p. 12
“our focus is to reduce it only, duly offset by the retail.”
Raghavendra Bhat, page 12 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said the bank plans to open 31-32 branches this year, with most before H1 end, while continuing focus on RAM segment.
Answered by Raghavendra Bhat
Asked by Sushil Choksey: What is the branch expansion strategy given growth focus areas?
p. 7
“we have plans for opening around 31 to 32 branches during the current financial year. One branch we have already opened.”
Raghavendra Bhat, page 7 of the filed PDF · View the filing
Management expressed confidence that growth would continue to improve through the year, noting April was positive for the first time in many years.
Answered by Raghavendra Bhat
Asked by Pranay Dhelia: Will this be the worst quarter of the financial year given the growth roadmap?
p. 9
“This year, from April itself, we are positive and the numbers are out as of Q1. I am quite confident that this year, the growth will be good and we will try to make it better and best.”
Raghavendra Bhat, page 9 of the filed PDF · View the filing
Management attributed the SMA rise to holiday-related payment defaults and said they do not foresee additional provisioning requirements.
Answered by Raghavendra Bhat
Asked by Vinay Nadkarni: Does the rise in special mention accounts and SMA-2 indicate higher provisions ahead?
p. 10
“So, we don't foresee or we don't require any additional provisioning because of slippage, going forward.”
Raghavendra Bhat, page 10 of the filed PDF · View the filing
Management said the bank has a dedicated team working on ECL readiness since April and is capable of managing the impact.
Answered by Raghavendra Bhat
Asked by Vinay Nadkarni: Will the upcoming ECL mandate require additional provisions?
p. 10
“We are very well ready and we don't foresee any problem because of that.”
Raghavendra Bhat, page 10 of the filed PDF · View the filing
Management said employee cost has not materially changed and is driven by periodic yield movement on gratuity/retirement provisions, and expects it to remain in a similar range.
Answered by Raghavendra Bhat
Asked by Apeksha Bajaj: What caused the increase in employee cost and what is the normalized run rate?
p. 10
“Employee cost, I don't foresee much change in that. Because of the yield movement and all, there will be ups and downs, which we are doing that every quarter.”
Raghavendra Bhat, page 10 of the filed PDF · View the filing
Management said ROA had crossed 1% and was now aiming for 1.35% to 1.40%.
Answered by Raghavendra Bhat
Asked by Jyoti Khatri: What is the ROA/ROE target for FY27 and FY28?
p. 12
“It was 1.29% as of June, 2026. I was telling 1% plus. Going forward, I will tell you since it is already 1.29%, I am aiming 1.35% to 1.40%.”
Raghavendra Bhat, page 12 of the filed PDF · View the filing
Management said the focus remains on reducing bulk/large corporate exposure percentage while growing retail and mid-corporate segments, and cited sequential improvement in mid-corporate growth.
Answered by Raghavendra Bhat
Asked by Parth Gutka: Are large corporate short-term loans linked to T-bill or MCLR, and when will mid-corporate growth pick up?
p. 13
“Last year, during the first 2 quarters, it was negative. I totally agree. Third quarter, by and large, moderated. Fourth quarter, it has shown growth. Fifth quarter, it has grown further and we have a lot of actions happening on the ground.”
Raghavendra Bhat, page 13 of the filed PDF · View the filing
Management explained that retail hubs were established across 15 regional offices to drive retail growth, and that volume growth in retail takes time to build.
Answered by Raghavendra Bhat
Asked by Manoj Yeddanapuri: What is driving the 25% growth in the 'other' advances segment versus RAM's slower pace?
p. 14
“For that, what we had done during last year, immediately after taking over charge, these retail hubs, which we have started in all 15 centres.”
Raghavendra Bhat, page 14 of the filed PDF · View the filing
Risks flagged
Prolonged West Asia conflict escalating risk to growth and inflation
p. 3
“While the prolonged West Asia conflict escalates risk to growth and inflation, high frequency indicators show that domestic economic activity remains resilient.”
Raghavendra Bhat, page 3 of the filed PDF · View the filing
Potentially deficient Southwest monsoon posing risk to agricultural demand
p. 3
“Looking ahead, supply disruptions and elevated commodity prices could impact economic activity and a potentially deficient Southwest monsoon poses risk to agricultural demand.”
Raghavendra Bhat, page 3 of the filed PDF · View the filing
Special mention accounts and SMA-2 increase due to holiday-related defaults
p. 10
“So, from around double digit, we have brought it down to single digit and efforts are continuously on.”
Raghavendra Bhat, page 10 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.