Karnataka Bank is a private sector bank serving 14 million customers across 22 states, with 32.1% of its portfolio in MSME & Agri loans. The Q2 print will speak to whether net interest margin can build on the 3.20% reached in Q1 FY27, and whether the provisional advances growth of 24.94% YoY comes with the retail/mid-corporate mix discipline management has promised.
| Results date | October 28, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Previous quarter NII | Rs. 938.29 Cr (+24.18% YoY) |
| Previous quarter PAT | Rs. 418.95 Cr (+43.28% YoY) |
| Previous quarter NIM | 3.20% |
| Market cap | Rs. 11,372.42 Cr |
| CMP | Rs. 300.55 |
Karnataka Bank Ltd will announce its Q2 FY 2026-2027 results on October 28, 2026.
Separately, the bank's FY26 final dividend of Rs. 5.00 per share (50% on Rs. 10 face value) was approved at the 102nd AGM held on September 22, 2026, with a record date of September 15, 2026 and payment on or after September 29, 2026.
The Q2 FY27 print is the key checkpoint on whether Karnataka Bank can close the 6 bps gap between Q1 ROA of 1.29% and the upgraded FY27 target of 1.35-1.40%, with NIM guided at 3-3.4% off a 3.20% Q1 base. The provisional Q2 update shows gross advances of Rs. 92,014.58 Cr, up 24.94% YoY — ahead of the 15-20% guided band and ahead of system credit growth of about 18-19% — while deposits at Rs. 115,138.05 Cr grew 11.98% YoY, behind the system's 15.4%. The in-quarter rate setup was benign: the repo was held at 5.25% through the entire July-September window, so the roughly 80% EBLR-linked book saw no fresh downward reset, and fresh term-deposit rates fell 18 bps into August, extending the funding-cost tailwind that took cost of funds from 5.58% in Q2FY26 to 5.16% in Q1FY27. The offset is the CASA ratio, which slipped 61 bps QoQ to a provisional 31.81% — moving away from the 33%+ FY27 target — and the October 7 repo hike of 25 bps to 5.50% with a 'calibrated tightening' stance, which makes Q2 the last quarter of an unambiguously benign rate window. Asset quality follow-through is the other thread: the Rs. 3,435 Cr SMA-2 stock with about 76% claimed regularised post-quarter close, slippage ratio off the 0.14% Q1 base, and recoveries from the Rs. 2,500-2,700 Cr technical write-off book against a 50% recovery target.
Performance vs Guidance Tracking: Where the bank stands against its own FY27 targets heading into the Q2 print:
NIM bridge off 3.20% and ROA vs the upgraded target
CASA ratio 31.81% vs 33%+ target
Asset quality: SMA-2 stock and recovery engine
Leadership succession and ECL readiness
Management upgraded the FY27 ROA target to 1.35-1.40% at the July 30, 2026 Q1 call, after Q1 FY27 ROA came in at 1.29%. The Q2 print is the key checkpoint on closing the 6 bps gap to the low end of that band.
The final RBI Directions issued April 27, 2026 introduce an ECL staging framework with provisioning running from FY 2027-28 and transition as on April 1, 2027 via retained earnings. Management has not yet quantified the additional provisions; the open question on the call is quantification, not timing.
Provisional Q2 gross advances grew 24.94% YoY to Rs. 92,014.58 Cr, above the 15-20% guided band, with the 'Others' segment growing 25.23% versus RAM's 12% in Q1. Management has said it will consciously reduce bulk advances and grow in retail and mid-corporate, so the mix is what analysts are watching.
GNPA fell from 3.33% in Q2FY26 to 2.58% in Q1FY27, with NNPA down from 1.35% to 0.87%, and the slippage ratio improved to 0.14%. The SMA-2 stock rose to Rs. 3,435 Cr from Rs. 2,917 Cr at Q4FY26, which management attributed to 'temporary aberrations' with about 76% regularised after quarter close.