Karur Vysya Bank Reports 17% Rise in H1 Profit; Strong Business Growth and Robust Asset Quality
The Bank reported a healthy performance for the half year ended September 30, 2025, marked by steady growth in profitability, strong balance sheet expansion, and sustained asset quality metrics.
Balance Sheet & Business Growth
As of September 30, 2025, the balance sheet size stood at Rs. 1,30,099 crore, reflecting a 15.92% year-on-year growth from Rs. 1,12,236 crore a year earlier.
Total business grew by 15.37% to Rs. 2,03,216 crore, an increase of Rs. 27,078 crore from Rs. 1,76,138 crore as of September 30, 2024.
Total deposits rose to Rs. 1,10,492 crore, up 15.29%, driven by strong traction in retail and CASA deposits. Advances grew 15.47% to Rs. 92,724 crore, compared with Rs. 80,299 crore in the same period last year.
Financial Performance – H1 FY2026
Net profit for the half year surged 17.49% to Rs. 1,095 crore as against Rs. 932 crore in the same period last year, supported by higher interest and fee income.
Pre-Provision Operating Profit (PPOP) increased 16.71% to Rs. 1,823 crore versus Rs. 1,562 crore in H1 FY2025.
Net Interest Income (NII) stood at Rs. 2,202 crore, up 5.41%, while Net Interest Margin (NIM) moderated to 3.82% from 4.13%, reflecting rising deposit costs.
The cost of deposits rose by 17 basis points to 5.69%, while yield on advances softened to 9.88% (down 23 bps YoY).
Fee-based income improved 7.46% to Rs. 504 crore, and operating expenses increased to Rs. 1,477 crore from Rs. 1,382 crore. The cost-to-income ratio improved to 44.76% from 46.95% a year earlier.
Financial Performance – Q2 FY2026
In the July–September quarter, net profit rose 21.35% to Rs. 574 crore, compared with Rs. 473 crore in Q2 FY2025.
PPOP grew 24.63% to Rs. 1,017 crore, while NII increased 5.65% to Rs. 1,122 crore.
NIM stood at 3.77%, lower than 4.12% in the year-ago period.
Commission and fee income rose 10% to Rs. 253 crore, while operating expenses increased to Rs. 756 crore from Rs. 716 crore.
The cost-to-income ratio improved notably to 42.63% from 46.72% a year earlier.
Capital Adequacy
The Bank’s Capital Adequacy Ratio (CRAR) under Basel III norms stood at 16.58% as of September 30, 2025, higher than 16.28% last year, comfortably above the regulatory requirement of 11.50%.
Tier 1 Capital Ratio was 15.58%, while Risk-Weighted Assets rose to Rs. 72,498 crore, compared to Rs. 63,263 crore last year — indicating a well-capitalized balance sheet.
Asset Quality
Asset quality remained among the best in the industry.
Gross NPA (GNPA) stood at 0.76% (Rs. 708 crore) versus 1.10% (Rs. 886 crore) a year ago.
Net NPA (NNPA) declined to 0.19% (Rs. 176 crore) from 0.28% (Rs. 219 crore).
The Provision Coverage Ratio (PCR) improved to 96.76%, reflecting prudent provisioning.
Network Expansion
As of September 30, 2025, the Bank’s network expanded to 895 branches, 1 Digital Banking Unit, and 2,225 ATMs / Cash Recyclers, compared with 841 branches and 2,208 ATMs last year.
Notably, over 54% of branches are located in semi-urban and rural areas, underscoring the Bank’s continued focus on financial inclusion and regional growth.
Chanakya View
The Bank has delivered a balanced performance with strong growth across deposits, advances, and profitability. Margins have moderated slightly due to higher deposit costs, but superior asset quality, improved cost efficiency, and solid capital buffers position the Bank strongly for sustainable growth in the second half of FY2026.
