The Karnataka Bank Limited — PPTs, 12-08-2025: Investor Presentation

**Financial Highlights:**

For Q1 FY26, Karnataka Bank reported Profit After Tax (PAT) of ₹292.4 Cr, a 15.9% quarter-on-quarter (QoQ) increase. Net Interest Income (NII) saw a 3.2% QoQ decline to ₹755.6 Cr, with Net Interest Margin (NIM) softening to 2.82%. Gross Non-Performing Assets (GNPA) rose to 3.46% and Net NPA to 1.44% QoQ. However, Provision Coverage Ratio (excluding Technical Write-Offs) improved to 59.18%. Total Deposits decreased 1.5% to ₹1,03,242 Cr, and Gross Advances fell 4.7% to ₹74,267 Cr QoQ. Return on Assets (ROA) improved to 0.97% and Return on Equity (ROE) to 9.58%.

**Strategic Initiatives & Growth Drivers:**

The bank is accelerating its transformation journey, targeting 1.1-1.2% ROA and 1-1.2% NNPA. Key focus areas include granular advances in Retail, Agriculture, and MSME (RAM) segments through new product launches like KBL Asha Nivas Loan and revamped credit policies. Digitalization efforts are ongoing, with increased mobile app installations, debit card additions, and strategic tech investments like a new Technology, Digital & Product Hub and data analytics for decision-making.

**Business Developments:**

Expansion efforts include onboarding 198 Business Correspondents and establishing two Retail Asset Centers (RACs) in Bangalore and Mangalore to enhance lending reach. The bank is the first to be onboarded on ONDC rails for personal loan products and has intensified its focus on government business, securing ties for tax and bond collections. Collection efforts on NPA accounts post quarter-end yielded ~₹90 Cr.

**Market Position & Competitive Advantage:**

Leveraging its 100-year legacy, the bank serves 13.9 million customers across 953 branches in 22 states, with 46.4% of branches in rural and semi-urban areas. This strong geographical footprint and focus on community banking reinforce its "Bharat Ka Karnataka Bank" positioning. Diversified offerings span Retail, MSME, and Agriculture, supported by digital capabilities for client acquisition.

**Investor Implications:**

Despite QoQ NII/NIM contraction and slight asset quality deterioration, the healthy PAT growth and improved provision coverage are positive indicators. The bank's aggressive digital transformation and strategic focus on RAM segments could unlock significant future growth potential. Investors should monitor the execution of these initiatives and the ongoing effectiveness of asset quality management.