Transcript of earnings audio call

Karnataka Bank Ltd. Your Family Bank. Across India. Regd. & Head Office Phone : 0824-2228222 Post Box. No.: 599 Mahaveera Circle E-Mail : comsec@ktk.bank.in Kankanady Website : www.karnatakabank.bank.in Mangaluru – 575 002 CIN : L85110KA1924PLC001128 SECRETARIAL DEPARTMENT HO:SEC: 209 :2026-27 Date: 04.11.2026 The Manager The Manager Listing Department Corporate Relationship Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, C-1, Block G Phiroze Jeejeebhoy Towers Bandra-Kurla Complex, Bandra (E) Dalal Street MUMBAI - 400051 MUMBAI - 400001 NSE Scrip Code: KTKBANK BSE Scrip Code: 532652 Madam / Dear Sir, Sub: Transcript of Q2FY27 Earnings’ Audio Conference Call Pursuant to Regulation 30 read with Clause 15 (b) of Para A of Part A of Schedule III and Regulation 46 (2) (oa) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we attach herewith the transcript of the post results analysts / institutional investors audio conference call held on Thursday, October 29, 2026, on the unaudited, reviewed Standalone & Consolidated Financial Results of the Bank for the quarter and half year ended September 30, 2026. The same is also made available on the Bank’s website under the following web link: https://karnatakabank.bank.in/investors/quarterly-results This is for your kind information and dissemination. Yours faithfully, Sham K Company Secretary & Compliance Officer “The Karnataka Bank Limited Q2FY27 Earnings Conference Call” October 29, 2026 MANAGEMENT: MR. RAGHAVENDRA S. BHAT – MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER MRS. BIJI S. S. – EXECUTIVE DIRECTOR Page 1 of 15 October 29, 2026 Moderator: Ladies and gentlemen, good day and welcome to the Karnataka Bank Q2 FY 2026-'27 Earnings Conference Call. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Today, we have with us on the call the Managing Director and CEO, Mr. Raghavendra S Bhat and Executive Director, Mrs. Biji S S, from Karnataka Bank. I now hand over the conference to Mr. Raghavendra S Bhat, Managing Director and CEO. Thank you, and over to you, sir. Raghavendra Bhat: Good evening, Mr. Alaric. A very pleasant evening to everyone and thank you for participating in the Q2FY27 earnings call of Karnataka Bank, a banking institution that has successfully navigated the financial landscape for more than 102 years. The journey began in 1924 with a simple purpose: to serve our customers with trust, prudence and a personal touch. As we now continue our journey in the second century of financial service, we have grown increasingly resilient and continue to serve as a dependable banking ally for millions worldwide. Rooted in its legacy from the coastal city of Mangaluru in Karnataka, our Q2FY27 performance showcases a steady consecutive quarterly expansion powered by our stakeholders, customers and staff under the capable stewardship of our Chairman and the Board. We have successfully delivered on our promises to the investors and secured substantial enhancements across every primary financial metric, demonstrating the impact of structured implementation and operational excellence. Our strong growth trajectory reflects substantial operational progress, which will become clear as we walk through the financial metrics. I trust you have had the opportunity to walk through our financial results and investor presentation, which were circulated after yesterday's Board meeting. Turning to the broader financial system, the Monetary Policy Committee, MPC, has unanimously voted to increase the policy repo rate by 25 basis points to 5.50% during its October '26 meeting. The MPC also decided to change the stance to calibrated tightening. Global growth remained resilient in 2026 so far, supported by AI-related investment and fiscal stimulus measures despite disruptions due to the ongoing West Asia conflict. Renewed energy price pressures stoked inflation pressures and prompted a more hawkish stance from the regulator. Fiscal sustainability concerns, persistent inflation and geographical uncertainty raised bond yields, while equity markets remained volatile amid lingering concern on valuations of technology stocks. The domestic economy showed resilience in H1 2026-27 despite continued global uncertainty amidst the conflict. The supply side pressures were well managed by proactive policy measures by the government that ensured adequate supply of key inputs. Real GDP recorded a growth of 7.8% in Q1 2026-27, reflecting strong momentum in underlying economic activity. Aggregate demand remained strong on the back of both private consumption and investment. Page 2 of 15 October 29, 2026 Going forward, India's macroeconomic outlook remains resilient, supported by domestic demand and strengthening investment despite persistent global uncertainties. The outlook remains vulnerable to geopolitical developments, volatility in global energy markets and weather-related uncertainties. Weak monsoons, protracted geopolitical tensions, rising international commodity prices, additional frictions in global trade and tightening of global financial conditions could adversely impact the growth outlook. Let me now present the business highlights. Bank has achieved its highest ever aggregate business, which stood at INR2,07,132 crores as of 30th September, 2026, up by 5% Q-on-Q from INR1,97,007 crores as on 30th June, 2026 and up by 17% Y-o-Y from INR1,76,461 crores as on 30th September, 2025. Gross advances stood at INR92,015 crores as on 30th September, 2026, reflecting a Q-o-Q growth of 6% from INR86,610 crores as on 30th June, 2026 and a Y-o-Y growth of 25% from INR73,644 crores as on 30th September, 2025. Our overall strategy is to continue our focus on growing retail, agri and MSME book. Our RAM portfolio has grown from INR53,172 crores as on June, 2026 to INR56,968 crores as on September, 2026, which is 7% Q-o-Q growth and from INR47,958 crores as on September, 2025, which is a 19% Y-o-Y growth. In absolute terms, MSME, housing, gold, agri and car loans have contributed around INR3,598 crores to our retail segment during Q2FY27. The bank continues to reduce low-yield corporate exposure in accordance with our earlier stated strategy. We are systematically replacing the IBPC book with higher-yielding loans to drive margin expansion. IBPC portfolio, which was at INR1,375 crores as on 30th June, 2026 has been brought down to INR1,309 crores as on 30th September, 2026. Accordingly, around INR66 crores have been replaced during Q2FY27. Going forward, our strategy focuses on accelerating retail expansion and stabilizing the corporate portfolio by prioritizing high-quality, better yielding assets. Aggregate deposits as on 30th September, 2026 stood at INR1,15,117 crores, reflecting a Q-o-Q growth of 4% over 30th June, 2026 at INR1,10,396 crores and a Y-o-Y growth of 12% over 30th September, 2025 at INR1,02,817 crores. CASA ratio as on September, 2026 was 31.80% and 32.42% as on June, 2026 as against 31.01% as on September, 2025. The bank has continued to focus on shifting high-cost bulk deposits to granular retail deposits of less than INR3 crores. The retail term deposits that is less than INR3 crores has grown by 4% from INR69,410 crores as on June, 2026 to INR72,197 crores as on September, 2026. On a Y-o-Y basis, retail term deposits have grown by 10% from INR65,532 crores as on September, 2025. The bank is actively trying to consciously lower its dependence on expensive bulk deposits while making sure that most of the renewals are carried out at established card rates, which allows for better management of the total cost of deposits. Page 3 of 15 October 29, 2026 CD ratio as on September, 20 [Showing first 8,000 characters — download PDF for full document]