Karnataka Bank Shares Near 52-Week High, FII-DII Holdings Rise To Four-Year High As Q2 Profit Jumps 37%

New Delhi: Karnataka Bank shares are attracting institutional investor interest as the private-sector lender shifts its lending strategy towards retail, agriculture and MSME (RAM) banking while improving asset quality and profitability.

The Mangaluru-based bank reported a 37 percent year-on-year rise in net profit for the September 2026 quarter, with total business crossing Rs 2.07 lakh crore for the first time.

Foreign institutional investors (FIIs) and mutual funds increased their holdings during the September quarter, reaching their highest levels in four years.

Karnataka Bank Shares Near 52-Week High

Karnataka Bank shares witnessed profit-booking on Thursday, October 29, 2026, after gaining 3.77 percent in the previous session. According to market data at 12:09 pm IST, the stock was trading at Rs 305.25 on the NSE, down Rs 5.75 or 1.85 percent from its previous close of Rs 311. The stock touched an intraday high of Rs 313.25 and a low of Rs 293.50. Despite Thursday's decline, the share remained around 11.75 percent below its 52-week high of Rs 345.90. The bank's market capitalisation stood at approximately Rs 11,550 crore. Institutional investor interest, improving profitability and stronger asset quality remain the key themes supporting the broader story.

Strong Q2 Results

The bank's board approved its quarterly financial results on October 28, 2026.

Operating profit rose 36.86 percent year-on-year to Rs 602.22 crore, while net interest income increased 34.93 percent to Rs 982.44 crore.

Net interest margin (NIM) improved by 45 basis points to 3.17 percent, reflecting stronger lending profitability.

The cost-to-income ratio declined from 58.93 percent to 52.68 percent. Return on assets improved to 1.26 percent, while return on equity increased to 12.51 percent.

Loans And Deposits

Gross advances jumped 24.95 percent year-on-year to Rs 92,015.26 crore, significantly outpacing deposit growth of 11.96 percent to Rs 1,15,117.15 crore.

Current and savings account (CASA) deposits increased 14.82 percent to Rs 36,605.40 crore, taking the CASA ratio to 31.80 percent.

The bank's RAM portfolio expanded 19 percent to Rs 56,968.79 crore, highlighting its focus on retail and smaller borrowers.

Improving Asset Quality

Gross non-performing assets (NPAs) declined from 3.33 percent to 2.27 percent, while net NPAs fell from 1.35 percent to 0.74 percent.

However, NIM slipped marginally from 3.20 percent in the June quarter to 3.17 percent.

For the first half of FY27, net profit surged 39.79 percent to Rs 854.84 crore, while net interest income increased 29.45 percent to Rs 1,920.73 crore.

Stock Near 52-Week High

On October 28, Karnataka Bank shares traded 3.77 percent higher at Rs 311.15 around 3:29 pm.

The stock remained approximately 9.3 percent below its 52-week high of Rs 343.

Its one-year return stood at 75.35 percent, compared with a 9.01 percent decline in the BSE 500 index.

The bank's market capitalisation stood at Rs 11,343.80 crore.

Disclaimer: This article is for informational purposes only. Investors should consult financial advisers and assess market risks before investing.