Karnataka Bank Reports Mixed Financial Results, Highlights Capital Adequacy and Declining Profitability in June 2025

Karnataka Bank has recently reported its financial results for the quarter ending June 2025, revealing notable trends in its performance. The bank's score has experienced an adjustment in evaluation, reflecting a shift from -9 to -10 over the past three months.
On a positive note, the bank's Capital Adequacy Ratio (CAR) has reached a high of 20.46%, marking the best performance in this metric over the last five quarters. This indicates an improvement in the bank's capital base relative to its risk assets, although it raises questions about the adequacy of risk-taking in its lending practices.

Conversely, several areas of concern have emerged from the financial results. The Profit Before Tax (PBT) has shown a significant decline, recorded at Rs -1.87 crore, which is markedly lower than the average PBT of Rs 92.77 crore from the previous four quarters. Additionally, the Net Interest Income has reached its lowest point at Rs 755.60 crore, continuing a downward trend over the last five quarters. The Profit After Tax (PAT) also reflects a decrease, standing at Rs 292.40 crore, which is below the average of Rs 318.09 crore from the previous four quarters. Furthermore, the high proportion of Non-Operating Income, which constitutes 100.52% of PBT, raises sustainability concerns regarding the bank's business model.

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