Karnataka Bank shares jump 5% as Q4 net profit jumps 61% YoY; shares rally 26% YTD

Shares of Karnataka Bank jumped over 5% on Wednesday morning after the private bank posted strong Q4FY26 earnings. The shares traded at ₹254 apiece on the NSE, up 2.5% at the time of writing. The bank also reported improvement in asset quality with strong return ratios.

The bank posted net-interest income of ₹843 crore for the quarter ending March 2026, as compared to ₹780 crore in the quarter ended March 2025, a growth of 7.8%. The growth was partially driven by lower interest expenses during the quarter as the gross interest income largely remained flat at ₹2,257 crore vs ₹2,258 crore in the previous year’s same quarter.

The bank’s operating profit improved 64% YoY to ₹615 crore as compared to ₹343 crore in the same period last year. This was largely due to a sharp drop in employee expenses for the quarter. The employee benefit expenses dropped over 46% to ₹279 crore as compared to ₹346 crore in the same period last year.

On the asset quality front, the bank’s GNPA (gross non-performing assets) ratio improved from 3.08% in the quarter ending March 2025 to 2.78% in the quarter ending March 2026. Similarly, the NNPA also improved from 1.3% to 0.98% during the same period. Apart from the asset quality improvement, the net-interest margins for the quarter also improved from 2.98% to 3.07%.

On the balance sheet front, the bank’s total advances for the period ending March 2026 improved by 6.8% YoY to ₹81,809 crore as compared to ₹76,541 crore in the previous year. While the deposits improved slowly by 3.70% to ₹1,08,778 crore as compared to ₹1,04,807 crore in the FY25.

Commenting on the results, Shri Raghavendra S. Bhat, Managing Director & CEO, said, “The Bank has achieved an all-time high annual net profit of Rs. 1,310.50 crme, reflecting the strength of its resilient business model, focused growth strategy, and continued emphasis on operational efficiency”.

The shares have delivered strong returns in 2026 alone by rallying over 26% on a YTD basis, outperforming the benchmark NIFTY50 index, which is trading 6% lower in the same period.