Karur Vysya Bank Q4 FY26 profit jumps 41%, dividend ₹2.6

Key takeaway from the Q4 update

Karur Vysya Bank (KVB) reported a strong March-quarter performance, led by higher operating profit and tighter asset quality. Net profit for Q4 FY26 rose 41% year-on-year to ₹725 crore, while gross and net NPAs improved marginally. The board also recommended a dividend of ₹2.60 per equity share for FY26, subject to shareholder approval at the upcoming AGM. In the earnings call, management said the bank’s FY26 performance was aligned with the guidance given at the start of the year, with growth, profitability and asset quality tracking expectations.

Q4 FY26 profit rises to ₹725 crore

In its regulatory filing, the private sector lender reported net profit of ₹724.96 crore for the quarter ended March 2026, compared with ₹513.36 crore in the same quarter last year. Operating profit for the quarter was ₹1,246.76 crore, up sharply from the year-ago quarter. Earnings per share (adjusted) also increased to ₹7.50 from ₹5.31 a year ago, reflecting the improved quarterly profitability.

The bank’s total income for the January to March quarter rose to ₹3,519.45 crore from ₹3,025.26 crore in Q4 FY25. Interest earned in the quarter increased to ₹2,903.65 crore from ₹2,516 crore a year ago, indicating growth in core interest income alongside expansion in the balance sheet.

Full-year numbers: net profit growth of around 29%

For FY26, KVB reported a net profit of ₹2,510 crore, compared with ₹1,942 crore in FY25, as per the filing carried by news wires. In the earnings call, management also cited full-year net profit at ₹2,500 crore, calling it the highest in the bank’s history. Total income for the full year rose to ₹13,159 crore from ₹11,507.6 crore in the previous fiscal.

Management said operating profit for the quarter was ₹1,247 crore and ₹4,075 crore for the full year, a 27% increase over the previous year. It also highlighted that both quarterly profit and annual profit were the highest in the bank’s history.

Business growth stays robust, but moderation in the final quarter

Management reported total business of ₹2,14,420 crore as on March 31, 2026, compared with ₹1,86,569 crore a year earlier, registering 15% growth year-on-year. Advances stood at ₹98,754 crore, while deposits grew to ₹1,15,666 crore, with year-on-year growth of 17% and 13%, respectively.

The bank said it consciously moderated advances growth in the last quarter due to geopolitical tensions, and also moderated term deposit growth as a deliberate call. It highlighted that it did not go for bulk deposits at the year end, and certificate of deposits of ₹1,773 crore were reduced during the last quarter.

Net interest margin: FY26 beats guidance, but outlook cautious

Management discussed margin pressure during FY26 due to rising funding costs and repo rate reductions till the third quarter. It had guided for FY26 NIM in the 3.7% to 3.75% range initially, later indicating 3.9% to 3.95%. The bank reported full-year NIM of 3.97% excluding one-offs, and 4.11% including interest from written-off accounts and an income tax refund.

For Q4, the bank reported NIM of 4.25% excluding 7 basis points of interest income from an income tax refund, and said the quarter-on-quarter improvement was driven by lower cost of funds and higher yields. Even as FY26 closed slightly above guidance, management indicated it anticipates a drop in NIM in the upcoming year due to expected rate increases in retail time deposits.

Asset quality remains steady; slippages and provisions disclosed

On asset quality, gross NPA moderated to 0.75% of gross advances at March 2026, from 0.76% a year ago. Net NPA decreased to 0.19% from 0.20% over the same period.

Management reported gross slippages of ₹187 crore during the quarter and ₹744 crore for the full year, which it said equated to 0.75% of the loan book. Total provisions including standard, restructured NPA, prudential and floating provisions stood at ₹1,747 crore at year end, which works out to 1.77% of advances. It also said recoveries from technically written-off accounts were ₹216 crore in the quarter and ₹679 crore for the year.

Segment trends: retail growth strong, housing competitive

The bank flagged strong retail momentum, with retail advances increasing 25% over the year, supported by growth in mortgage and dual loans. At the same time, it noted competitive pressures in the housing loan segment, where growth was described as modest at 2%.

It also disclosed that the outstanding BNPL book was ₹798 crore as at March 31, 2026. In other segments, management said the commercial business grew 11.56% year-on-year but was flat in the last quarter, while the corporate advances portfolio posted 20% year-on-year growth.

Other income drivers highlighted by CFO

On the earnings call, the CFO attributed the increase in other income to higher processing charges, third-party income from insurance products, and an uptick in non-fund-based income from guarantee business. These drivers complemented the quarter’s stronger core interest income performance.

Dividend recommendation and stock reaction

The board recommended a dividend of ₹2.60 per equity share of face value ₹2 each (130%) for FY26, subject to shareholder approval at the ensuing AGM. Following the results, shares of Karur Vysya Bank settled 5.33% higher at ₹321.4 on the BSE, according to the report.

Key numbers at a glance

Why the results matter for investors

The March-quarter numbers show KVB’s profitability strengthening alongside stable asset quality. A 41% year-on-year rise in Q4 net profit, combined with improved GNPA and NNPA, points to controlled credit costs in a period when management also spoke about higher slippages in retail and commercial segments that were proactively recognised.

But the bank’s commentary also indicates a more cautious operating environment. It moderated growth in the final quarter and expects net interest margins to soften in the coming year due to higher retail term deposit rates. Management’s credit growth guidance was described as cautious, at about 1% to 2% above the industry average, signalling a conservative stance despite strong FY26 execution.

Conclusion

Karur Vysya Bank closed FY26 with record profitability, improving asset quality ratios, and a dividend recommendation of ₹2.60 per share. The next set of cues for investors will come from shareholder approval at the AGM and management commentary on margins and credit growth as deposit costs rise.