Karnataka Bank Targets ₹85,000 Crore Loan Book by FY26

Karnataka Bank, based in Mangaluru, aims to expand its loan book by ₹7,000–8,000 crore to cross ₹85,000 crore by March 2026. The focus will be on retail, agriculture, and MSME (RAM) lending as the bank stabilises operations after leadership changes in Q1FY26.

Current Loan Book and Targets

As of June 30, 2025, the bank’s gross advances stood at ₹74,267 crore, down 1.6% from ₹75,455 crore in June 2024. The new MD and CEO, Raghavendra S. Bhat, said the bank’s broader target is ₹89,000 crore, but reaching ₹85,000–86,000 crore is more realistic by FY26.

Shift in Credit Strategy

The bank has revised its credit policy to focus more on housing, mortgage, gold, and MSME loans, while reducing dependence on low-yielding large and mid-corporate loans. Executives highlighted that the strategy is to accelerate retail growth while maintaining quality in corporate lending.

Segment-Wise Performance

• Retail loans grew from ₹19,499 crore in June 2024 to ₹21,538 crore in June 2025.
• Agriculture loans rose from ₹10,906 crore to ₹12,168 crore.
• MSME loans contracted from ₹14,834 crore to ₹13,860 crore.

Profit Decline in Q1FY26

The bank reported a 27% fall in net profit to ₹292.4 crore in Q1FY26, compared with ₹400.3 crore a year earlier. This was due to weaker net interest income and higher provisions.

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Karnataka Bank Share Price Movement

Karnataka Bank share price on 22 August at 11:57 am IST stood at ₹171.49, down by ₹0.19 or 0.11% from the previous close. The stock opened at ₹172.40 and touched an intraday high of ₹172.40 and a low of ₹170.66. Karnataka Bank’s market capitalisation is ₹6,470 crore, with a price-to-earnings (P/E) ratio of 5.58. The stock has a 52-week high of ₹243.20 and a 52-week low of ₹162.20. Currently, the company does not offer any dividend yield.

Conclusion

Karnataka Bank is betting on strong growth in retail, agriculture, and MSME lending to expand its loan book beyond ₹85,000 crore by FY26. While profits slipped in Q1, the shift in strategy and revised credit policies aim to build a more stable and profitable portfolio in the coming years.

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