Karur Vysya Bank Q2 FY26: Profit +21%, Business +15%

What the latest numbers show

Karur Vysya Bank (KVB) reported a stronger set of operating metrics for the period ended September 30, 2025, with double-digit year-on-year growth in total business, deposits, and profitability. The bank’s balance sheet expanded to ₹1,30,099 crore as of September 30, 2025, up 15.92% from ₹1,12,236 crore a year earlier. Total business stood at ₹2,03,216 crore, rising 15.37% year-on-year from ₹1,76,138 crore. Deposits grew 15.29% to ₹1,10,492 crore from ₹95,839 crore.

The bank also highlighted quarter-on-quarter momentum. As of September 30, 2025, total business rose 4% sequentially, with advances and deposits both up 4% quarter-on-quarter. On a year-on-year basis, the bank said advances and deposits each grew by 15%.

Q2 performance: profit, PPOP and NII

On profitability, the bank reported net profit of ₹574 crore for the quarter, up 21.35% from ₹473 crore in the corresponding quarter of the previous year. Pre-provision operating profit (PPOP) rose 24.63% to ₹1,017 crore from ₹816 crore. Net interest income (NII) increased 5.65% to ₹1,122 crore, with the bank specifying this was excluding a one-off interest income.

The combination of higher PPOP and profit, alongside steady NII growth, indicates that operating leverage and non-interest drivers likely played a role in the quarter’s outcome, though the disclosure here focuses on the reported aggregates and growth rates. Investors typically track PPOP closely for banks because it reflects earnings strength before credit costs and provisioning.

Business growth as of September 30, 2025

KVB’s stated total business of ₹2,03,216 crore as of September 30, 2025 combines advances and deposits. Deposits were ₹1,10,492 crore on the same date, while advances were reported at ₹92,724 crore. The bank described this as sustained growth momentum into the second quarter, with both advances and deposits growing 4% quarter-on-quarter.

The year-on-year growth of 15% in both advances and deposits was positioned as balanced expansion on both sides of the balance sheet. That balance matters for banks because aggressive loan growth without deposits can raise funding costs, while deposit growth without credit growth can dilute yields.

FY25 context: record annual and quarterly profit

The September 2025 update follows a strong FY25 outcome for the lender. For the January to March quarter of FY25 (Q4 FY25), KVB reported net profit of ₹513 crore, a 12.5% year-on-year increase. The bank described this as its highest quarterly profit for Q4.

For the full year ended March 31, 2025, KVB posted its highest-ever annual net profit of ₹1,942 crore, up 20.99% from ₹1,605 crore in FY24. Managing Director and CEO Ramesh Babu B said the performance was guided by three metrics: growth, profitability, and asset quality, and added that advances and liabilities grew 14% each during the year.

Margins, income mix, and costs in Q4 FY25

In Q4 FY25, KVB’s PPOP increased 17.60% to ₹835 crore (excluding a one-off item of ₹157 crore), compared with ₹710 crore in the year-ago quarter. NII rose 9.11% to ₹1,089 crore from ₹998 crore. Net interest margin (NIM) for the quarter was reported at 4.05%, compared with 4.20% in the corresponding quarter of the previous year.

Operating expenses for Q4 FY25 were ₹764 crore versus ₹757 crore a year earlier. The cost-to-income ratio improved to 47.77% from 51.62% year-on-year. For FY25, cost-to-income ratio was reported at 47.25% versus 48.26% in FY24, while operating expenses were ₹2,877 crore versus ₹2,639 crore.

Asset quality and provisioning snapshot

KVB reported an improvement in gross non-performing assets (GNPA) in FY25. As of March 31, 2025, GNPA stood at 0.76% of gross advances (₹642 crore), improving from 1.40% (₹1,042 crore) as of March 31, 2024. Net NPAs were reported at 0.2% of net advances, compared with 0.4% year-on-year. Provision coverage ratio was 96.81% in FY25 versus 94.85% in FY24.

These indicators are closely watched for smaller private banks, where sustained growth typically needs to be matched with stable credit quality. The FY25 disclosure also included risk-weighted assets of ₹66,261 crore as of March 31, 2025, compared with ₹61,125 crore a year earlier.

Dividend and market datapoints disclosed

KVB’s Board recommended a dividend of 130% (₹2.60 per equity share of face value ₹2.00) for the year ended March 31, 2025, compared with 120% (₹2.40 per share) in the previous year. Separately, on a trading-day reference shared in the source material, the bank’s share price was reported at ₹228.20 at the end of trade while the Sensex was down 1.03%.

Other market datapoints mentioned include a trading snapshot showing ₹257.15, up ₹0.70 (0.27%), along with “38.59% gain from 52-week low” and volume of 569.1K (NSE+BSE), timestamped August 14, 2025 at 3:31 PM IST. The same compilation also cited a 52-week high of ₹246.15 and a 52-week low of ₹165.15, and valuation metrics of P/E 9.51x and P/B 1.57.

Key numbers at a glance

Why this update matters for investors

KVB’s September 2025 business snapshot points to continued balance-sheet expansion, with total business above ₹2,00,000 crore and deposits above ₹1,10,000 crore. The quarter’s profit and PPOP growth rates are higher than the NII growth rate disclosed, which usually makes investors look for details on other income, operating costs, and credit costs in the full results pack.

The FY25 context included record annual profit of ₹1,942 crore, improving GNPA ratio to 0.76%, and a higher dividend recommendation. Together, these disclosures frame the bank’s strategy around growth while maintaining asset quality metrics that remained among the most discussed indicators for smaller private-sector lenders.

Conclusion

Karur Vysya Bank’s reported figures for the period ended September 30, 2025 show 15% year-on-year expansion in total business, deposits, and balance sheet size, alongside a 21.35% rise in quarterly net profit to ₹574 crore. The bank’s FY25 disclosures also highlighted record annual profit, improved asset quality, and a higher dividend recommendation. The next investor focus will be on the detailed financial statement and commentary accompanying the period-end results, including drivers of PPOP and NII movements.