KTKBANKNSEQ4FY26May 20, 2026

The Karnataka Bank Limited

8,922words
97turns
13analyst exchanges
13executives
Management on call
Raghavendra S Bhat
Managing Director and Chief
Raja B S
Chief Operating Officer
Chandra Shekar
Chief Business Officer
Vinaya Bhat P J
Chief Compliance Officer
Vijayakumar P H
Chief Financial Officer
Jayanagaraja Rao S
GM (Inspection and Internal
Niranjankumar R
Chief Human Resources Officer
Nagaraja Upadhyaya B
GM (Credit Sanctions)
Raghuram H S
GM (Branch Banking Department,
Chandrashekara G
GM (Credit Sanctions)
Sham K
Company Secretary & GM (Operations)
Sreedhar S
GM (Credit Monitoring)
Manoj Kumar P V
Chief Risk Officer
Key numbers — 40 extracted
INR1,92,000 crore
ance of the Bank as against the guidance given earlier. Total business as against the guidance of INR1,92,000 crores of business, the figure was INR1,92,118 crores. Gross advances against a guidance of INR84,000 c
INR1,92,118 crore
earlier. Total business as against the guidance of INR1,92,000 crores of business, the figure was INR1,92,118 crores. Gross advances against a guidance of INR84,000 crores to INR85,000 crores, it was INR83,339.92
INR84,000 crore
2,000 crores of business, the figure was INR1,92,118 crores. Gross advances against a guidance of INR84,000 crores to INR85,000 crores, it was INR83,339.92 crores. Deposits, against the guidance of INR1,08,000 c
INR85,000 crore
ness, the figure was INR1,92,118 crores. Gross advances against a guidance of INR84,000 crores to INR85,000 crores, it was INR83,339.92 crores. Deposits, against the guidance of INR1,08,000 crores it was INR1,08
INR83,339.92 crore
,92,118 crores. Gross advances against a guidance of INR84,000 crores to INR85,000 crores, it was INR83,339.92 crores. Deposits, against the guidance of INR1,08,000 crores it was INR1,08,778.75 crores. CASA, arou
INR1,08,000 crore
R84,000 crores to INR85,000 crores, it was INR83,339.92 crores. Deposits, against the guidance of INR1,08,000 crores it was INR1,08,778.75 crores. CASA, around INR34,500 crores to INR35,000 crores, the figure wa
INR1,08,778.75 crore
0 crores, it was INR83,339.92 crores. Deposits, against the guidance of INR1,08,000 crores it was INR1,08,778.75 crores. CASA, around INR34,500 crores to INR35,000 crores, the figure was INR36,559 crores. CASA percen
INR34,500 crore
Deposits, against the guidance of INR1,08,000 crores it was INR1,08,778.75 crores. CASA, around INR34,500 crores to INR35,000 crores, the figure was INR36,559 crores. CASA percentage, we have mentioned as a gu
INR35,000 crore
e guidance of INR1,08,000 crores it was INR1,08,778.75 crores. CASA, around INR34,500 crores to INR35,000 crores, the figure was INR36,559 crores. CASA percentage, we have mentioned as a guidance of 32% to 32.
INR36,559 crore
it was INR1,08,778.75 crores. CASA, around INR34,500 crores to INR35,000 crores, the figure was INR36,559 crores. CASA percentage, we have mentioned as a guidance of 32% to 32.5% against which it was 33.61%. G
32%
,000 crores, the figure was INR36,559 crores. CASA percentage, we have mentioned as a guidance of 32% to 32.5% against which it was 33.61%. GNPA whatever guidance was given less than 3%, it was 2.78%
32.5%
ores, the figure was INR36,559 crores. CASA percentage, we have mentioned as a guidance of 32% to 32.5% against which it was 33.61%. GNPA whatever guidance was given less than 3%, it was 2.78%. NNPA gu
Guidance — 20 items
Raghavendra Bhat
opening
“As your Bank continues its journey into its second century of banking excellence, I am pleased to report that we have witnessed meaningful improvement in all the ratios and have delivered on the guidance given during my previous interactions with the investor community, a reflection of the disciplined execution of our strategy and improved operational efficiency.”
Raghavendra Bhat
opening
“Before going in detail about the results, let me have the opportunity to brief you about the performance of the Bank as against the guidance given earlier.”
Raghavendra Bhat
opening
“Total business as against the guidance of INR1,92,000 crores of business, the figure was INR1,92,118 crores.”
Raghavendra Bhat
opening
“Gross advances against a guidance of INR84,000 crores to INR85,000 crores, it was INR83,339.92 crores.”
Raghavendra Bhat
opening
“Deposits, against the guidance of INR1,08,000 crores it was INR1,08,778.75 crores.”
Raghavendra Bhat
opening
“CASA percentage, we have mentioned as a guidance of 32% to 32.5% against which it was 33.61%.”
Raghavendra Bhat
opening
“GNPA whatever guidance was given less than 3%, it was 2.78%.”
Raghavendra Bhat
opening
“NNPA guidance was less than 1%, it was 0.98%.”
Raghavendra Bhat
opening
“Cost to income, what the guidance was given was 55% to 56%, against which it was 56.34% FY '26, and for Q4 it was 50.47%.”
Raghavendra Bhat
opening
“ROA, we have given the guidance of 1% plus, against which it was 1.05%.”
Risks & concerns — 14 flagged
In this context of evolving external dynamics, we remain measured and cautious in our outlook.
— Raghavendra Bhat
Despite global headwinds arising from geopolitical tensions, volatile commodity prices and supply chain disruptions, the Bank continues to differentiate itself through its prudence, resilience, agility and strong customer-centric approach, supported by robust capital adequacy, comfortable liquidity and a disciplined execution framework.
— Launches planned during the coming quarters
So in Q4, there was a sharp decline on a sequential basis, but there was an increase in other opex.
— Chirag Singhal
Improvement in employees cost is a difficult task, no doubt about it.
— Raghavendra Bhat
So you are saying that the employee expense for entire FY26, like the full year FY26 employee expense, we should expect a similar number for FY27 also, not any significant decline because in Q4, clearly, there is a steep decline on a sequential basis?
— Chirag Singhal
Do you see that would lead to some kind of yield pressure going forward in FY27?
— Anand Dama
We are cost conscious and we are always working on the pressure of margin.
— Raghavendra Bhat
And my second question is what is the impact of ECL guidelines on the net worth and what would be the increase in the credit cost run rate post the implementation of the ECL guidelines?
— Parth Gutka
With regard to slippage coming down, I was mentioning earlier also and our focus on the day of taking over charge, I was telling, I want to control the stress.
— Raghavendra Bhat
And because of that, stress has come down, both under SMA and CMA.
— Raghavendra Bhat
Recovery under restructure, recovery under stress, recovery under CMA, whatever.
— Raghavendra Bhat
This question is very difficult to answer.
— Raghavendra Bhat
And then considering the last years’ experience where we have got in people from outside and because of the work, I mean, work cultural differences, we had difficult times in managing and then we had to overcome that.
— Raghavendra Bhat
Regarding employee cost and all, as I told you in the beginning and to others also, it is very much guarded, cautious decisions are taken.
— Raghavendra Bhat
Q&A — 13 exchanges
Q
Thank you. My question is whether advances have increased significantly during the quarter. Can you explain the rationale behind this and how it aligns with your funding and liquidity strategy?
Raghavendra Bhat
You are aware, as I was telling earlier in the beginning also, since our CRAR was good, I want to increase the advances first. To increase the advances, I need to have the fund. There was no shortage of funds. We could meet that funding requirement with the available resources and to some extent in between some short- term funds, we have also met it through borrowings. That was not the constraint at all. That’s it from my side.
Q
Congratulations, Mr. Bhat and the entire team.
Raghavendra Bhat
Good evening, Chirag. Thank you. The Karnataka Bank Limited May 20, 2026 Yes. This is I think the second quarter with consecutive growth and very good improvement across all the metrics, particularly in this quarter. Sir, first question on the guidance. So in Q4, clearly, many metrics have seen significant improvement. So, I'm just trying to understand how much we should extrapolate for the current fiscal. So, if you can please provide guidance on all the key metrics, advanced growth, ROA, credit cost, gross NPA and net NPA? Yes. I was mentioning earlier also in various meetings and forums, wh
Q
Sir, my question was on the other income. So other income had sharply risen during the current quarter. Is it more because of the core fee income going up? And if yes, what's the reason or is it more about treasury performance which has led to such kind of higher other income for us?
Raghavendra Bhat
One minute, my CFO, Mr. Vijayakumar will answer. Good evening. The other income increase is on account of fee-based income and also recovery from the technical write-off portfolio. We have a technical write-off portfolio of about INR2,500 crores. Recovery under technically written-off account. When the business grows along with the interest income, other income also will grow from processing charges and other fee-based income. If it is a non-funded commission on bank guarantee, all those improvements will be there. But is it more significant in nature because when you look at the treasury gain
Q
Sir, if I look at your slide 24, the number of employees in the first 9 months had increased. And in the last quarter, it has actually declined. What is actually happening here?
Raghavendra Bhat
See, the number of staff is always going down. Every month, it will go down, with the superannuation. As and when required, we will recruit people. In between, last year, we have opened around 31 branches, staffs are required. In between, we recruit also. That during the first H1 or up to Q3, we have recruited some people. Again, Q4, there was no recruitment rather. Rather, people retired in 3 months. On average, 50 to 60 people getting superannuated and the number will go down to that extent and that is a continuous process. Every month, it will be there. Okay, sir. And my second question is
Q
Yes. Hi, so congratulations on a good set of numbers. I really appreciate the way you increased your PCR by 400 basis points. I'm pretty sure the bottom-line number would have looked much, much higher if you would have done it at the pace that you've done it in the previous quarters, which is only 100 basis points. So, this sort of acceleration, where are we aiming to reach by, let's say, in the next four quarters in terms of PCR or are you happy with where we are?
Raghavendra Bhat
See, it is a continuous process. As and when the quarter comes, do the business and how we are working with the efficiency in working, we will decide then and there. Don't think otherwise. We are very carefully moving forward. As you only said, it is very good, very well provisioning has been made. We do understand our responsibility working taking all precautions. We will take care. For the time being, yes, as it is going forward, we will decide. So, you don't have any number in mind where you would want the PCR to be by the end of this next coming financial year? The Karnataka Bank Limited M
Q
Yes. Hi, sir I would request you to note down the questions.
Priyank Chheda
Thank you. I will link the story. There were two, three surprises which I will note it down. I mean would like to call it out. One was gross slippages came down significantly in quarter 4 at INR147 crores versus a run rate of INR250 crores, INR300 crores. What has been the reason for that? This leads to maybe interest reversal because lesser slippages lead to lesser interest reversal. So, what has been that quantification or what has been that contribution in the interest income, which ultimately leads to NIM going higher because yields benefit. So, if you can link these three aspects together
Q
Sir. So, two questions. Firstly, on the NIMs. So, I think we had a lot of book which was linked to G-Sec. And so, if you can just break up the book into various EBLR or G-Sec, how what is the mix of our book? And secondly, sir, on the employee expense if the CFO, sir, can give us the data for how much was the gratuity-related, because yield increase, so that pool would have gone down in one quarter, so what was that impact specifically, if you can share that number? Thank you.
Raghavendra Bhat
Yes. CFO, can you share that? One is G-Sec percentage. For both the questions, we will share the information later on. Just e-mail the requirements. Right now, we don't have that. The Karnataka Bank Limited May 20, 2026 Okay, sir. Sir, broadly on the NIM side, so we have crossed 3%, and I recall that a large part of the book was related to G-Secs, and G-Secs have been actually hardening. So given that sort of a thing, because earlier we had a negative impact on our results because the G-Secs was falling before the repo rate. So, what is the outlook, sir, for next year NIM? As I was telling in
Q
Good evening Mr. Thippeswamy. Yaswanth Thippeswamy: Good evening, sir. I hope everyone is doing good. And congratulations. I know, in the middle of the management crisis last year, you joined and you have showed that what you are capable of. And kudos to team Karnataka Bank. You have put in a lot of effort to make sure that they are capable, and they are able to deliver it. So, I would want to also congratulate the Board of Directors for bringing in you and having confidence in you. And I'm also pleasantly surprised, I mean I'm surprised that there is a look out I mean, we have appointed, we h
Raghavendra Bhat
Good evening Thippeswamy, Yes, both your questions are relevant, difficult to answer. But I will assure you that the recruitment of Executive Director has been taken based on the need arisen at a particular point of time. Executive Director was there earlier. The Karnataka Bank Limited May 20, 2026 Executive Director was not there for the past around 9 or 10 months. It was a process required by, based on the, see sometimes need arises based on the requirement. That is one thing. Secondly, it does not mean that, as you rightly said, talent is inside. No doubt, we are not ignoring the talent. As
Q
Yes. Just one question. Most of my questions have been answered. Just want to know the disbursements that you have made for FY26, what is the figure, total disbursement?
Raghavendra Bhat
Pardon? Disbursement, loan disbursement. Loan disbursement, right now, last year, we had repayment of around INR26,000 crores for the entire year, around INR26,000 crores. And you can calculate INR26,000 crores is that figure. INR26,000 crores plus INR5000 crores, i.e. INR31,000 crores, INR32,000 crores. Okay. And then I'll send you an email to get the breakup of the corporate and mid-corporate also from there. No problem. Thank you very much. Thank you.
Q
Sir, first of all, many congratulations on a much better performance than what any of us could have imagined. You have actually rewarded the shareholders with the trust that they have reposed in you and now you have to beat this performance.
Raghavendra Bhat
Good evening, Pranay. Good evening, sir. So, is it that we've seen a sharp reduction in cost of manpower this quarter, year-on-year as well as quarter-on-quarter. So, is this, has this bottomed out now? Or will we see further reductions? Further reduction, I cannot tell because, as I told you, it's all depending upon the requirement. We will optimally use the staff resources. Definitely, yes, we have got plans of expansion, additional manpower required. At the appropriate time, we'll plan appropriately. By doing so, we can cut cost. That is the only answer I can give now. Otherwise, cost contr
Q
Sir, categorically, as specified by all these speakers earlier that these are definitely commendable results and the backdrop of what looked very drained out earlier. But for investor and even layman like me just to take into account, if we do a comparison on an annual basis? It is only this employee cost part that has significantly made a difference to the operating profit. Correct me there, sir. Because if we look at our interest income, the operating cost and the employee cost part, that we had posted operating profit before provision of INR1,827 crores for FY25. This has risen to INR1,974
Raghavendra Bhat
Yes. It is not quarter-on-quarter or half-yearly. It is on a monthly basis. We have this time changed our strategy that growth should come every month rather. Out of the growth percentage, we said 5% in first 3 months, that is, 15%, next 3 months 8%, next 3 months 9%, next 2 months 10%, and last month 14%. If I analyze the history of our bank for the past 10 years, the growth has come mainly in H2 and more percentage in Q4. Taking that into account, we have bifurcated business plan in such a way that, first, H1, the growth percentage will be around 39%. H2, it should be 61%. The bifurcation, a
Q
Good evening sir. Thank you very much for giving me an opportunity to post the question before you. I'm an individual investor and also my corporate company also has invested in the Karnataka Bank. First, let me congratulate you for a good set of numbers you definitely post, which was beyond our expectation. And also the NPA is another thing which I have been always telling and you assuring me which coming in the line at par with the good banks. So for that, congratulations. Good dividend also you have given. Sir, my only worry is now the situation in the Middle East. Are we dependent on the d
Raghavendra Bhat
Good evening. Umesh, as you yourself asked the question, you yourself answered also. My job, you made it easy rather. With regard to the depositors from Middle East or whatever, in a way, it's good, I should not say, all banks are trying to get good NRI deposits and FCNR deposits. But we have a little portfolio, not sizable portfolio. Majority is local domestic deposits only. The Karnataka Bank Limited May 20, 2026 External situation do affects the internal situation also. That is not in our control. But with regard to your specific question of the deposits from Middle East, it is not sizable
Q
Yes. Thanks to all the investors who have posed the questions, and whatever best we have presented our case, number one. Number two, still if there are any clarification required, you are all free, I assure you, feel free to seek clarification. We will try to give the best clarification to you, number one. Number two is, a lot of people have spoken high about the results. We assure you that we will work still hard and thanks for reposing the confidence on the Bank also. I need your support going forward. And whatever these plans are there, we will try to come and connect with you. And definite
Management
Speaking time
Raghavendra Bhat
40
Moderator
15
Chirag Singhal
7
Priyank Chheda
6
Anand Dama
4
Sarvesh Gupta
4
Vinay Nadkarni
4
Pranay Dhelia
3
Anshul Patel
2
Vijayakumar P H
2
Opening remarks
Raghavendra Bhat
Thank you. Good evening and thank you for joining the Karnataka Bank Q4 FY '26 Earnings Call. The Karnataka Bank, a bank which began its journey from Mangaluru, a coastal city of Karnataka, has emerged even stronger during the just concluded financial year 2025-'26, thanks to the collective resolve of every stakeholder, every customer and every employee of the Karnataka Bank. The results we announced yesterday reflect sustained momentum which we have built day after day and quarter after quarter. As your Bank continues its journey into its second century of banking excellence, I am pleased to report that we have witnessed meaningful improvement in all the ratios and have delivered on the guidance given during my previous interactions with the investor community, a reflection of the disciplined execution of our strategy and improved operational efficiency. Before going in detail about the results, let me have the opportunity to brief you about the performance of the Bank as against the
Launches planned during the coming quarters
Agri input loans for tobacco crops, short-term agri input loans are extended to registered tobacco growers to meet the cultivation requirements, with digital onboarding and faster sanctioning under a tobacco board tie- up. Programmable CBDC enables the funds to be used only for predefined purposes within a specified time or through designated beneficiary. NFC-based QR payments, Tap and Pay facilities are provided for QR payments. Surrogate-based lending for housing and mortgage loans. Dropline OD for MSME, LAP for MSME. Digital and Technology - The Bank is leveraging IT investments through modular and faster implementation of solutions. The Bank is also exploring leveraging AI tools for improving internal efficiencies, including process improvements. A few major solutions that are planned for completion in FY '26-'27 are loan originating system revamp with collateral management, implementation of DevSecOps, HRMS revamp, Treasury revamp and BHIM 3.0. The Karnataka Bank Limited May 20, 2
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