The bank's net interest income (NII) rose by 15.27% to Rs 574.87 crore in Q2 September 2020 over Q2 September 2019. Net Interest Margin (NIM) improved to 3.08% in Q2 September 2020 from 2.82% in Q2 September 2019.

Gross non-performing assets (NPAs) stood at Rs 2188.8 crore as on 30 September 2020 as against Rs 2557.64 crore as on 30 June 2020 and Rs 2594.27 crore as on 30 September 2019. The ratio of gross NPAs to gross advances stood at 3.97% on 30 September 2020 as against 4.64% as on 30 June 2020 and 4.78% as on 30 September 2019. The ratio of net NPAs to net advances stood at 2.21% as on 30 September 2020 as against 3.01% as on 30 June 2020 and 3.48% as on 30 September 2019.

The bank's provisions and contingencies increased by 22.76% to Rs 322.13 in Q2 September 2020 over Q2 September 2019. The provision coverage ratio stood at 75.44% in 30 September 2020 from 59.19% in 30 September 2019 on account of accelerated prudent provisioning.

Total deposits rose by 3.89% to Rs 72,922.58 crore while total advances grew 1.18% to Rs 54,098.93 crore in Q2 September 2020 over Q2 September 2019.

Commenting on the Q2 result, Mahabaleshwara M. S., MD & CEO said, "I am happy that this time Karnataka Bank has the privilege of flagging off Q2 earnings season for banking sector as we happen to be the first Bank to come out with Q2 FY21 results. I am very satisfied with the results as we have been able to keep the bottom line intact with a steady growth of 12.23% in net profit, improve the asset quality significantly as the GNPA and NNPA decreased to 3.97% and 2.21 %, respectively. Further, the Provision Coverage Ratio has also reached an all time high of 75.44% on account of accelerated prudent provisioning. The Bank has been successful in withering away the impact of COVID19 pandemic as the retail and mid corporate advances have also grown at 8.53% and 16.52%, respectively and share of CASA deposits also rose to 29.17% of total deposits. Bank has now started reaping the benefits of 'KBL VIKAAS', its Transformation exercise and there is significant improvement in all the fundamental parameters including the NIM (Net Interest Margin) which rose to 3.08% during the current quarter and CAR (Capital Adequacy Ratio) continuing at 13.08%. Going forward Bank is confident of continuing the consistent and sustainable performance and I thank all the customers and shareholders for their cooperation and patronage."

Shares of Karnataka Bank have risen 6.8% in five trading sessions. Karnataka Bank is a scheduled commercial bank having a network of 859 branches and 1,016 ATMs across India as on 30 September 2020.