Synopsis:- Reporting audited results for Q4 and full-year FY26, Karur Vysya Bank posted annual net profit of Rs.2,510 crore (up 29% year-on-year) as aggressive cost discipline drove a 27% rise in pre-provision operating profit; Q4 NIM recovered to 4.25% (adjusted) and GNPA held at a near-decadal best of 0.75%, reinforcing the bank’s quality-led growth narrative.
With a market capitalization of Rs. 29,286.22 crore, the shares of Karur Vysya Bank Limited were last recorded at Rs.304.70 per share, down 2.79 percent from its previous close of Rs.313.45.
A mid-sized private sector bank delivered what may be its most balanced annual scorecard in recent memory. Full-year net profit came in at Rs. 2,510 crore, rising 29 percent over Rs. 1,942 crore in FY25, the fourth consecutive year of meaningful profit acceleration. Net interest income for the year was Rs. 4,939 crore, up 16 percent, while non-interest income of Rs. 2,084 crore grew 14 percent, pushing total income to Rs. 7,023 crore, a 15 percent increase.
The more striking number, however, was on the cost line: operating expenses grew just 2 percent for the full year, even as employee expenses declined 1 percent. The cost-to-income ratio compressed from 47.25 percent in FY25 to 42.96 percent in FY26 (adjusted for one-off items), a 528-basis-point improvement that speaks directly to how operating leverage has started to flow through. Return on assets improved 21 basis points to 1.93 percent, and return on equity expanded 151 basis points to 17.79 percent. Full-year EPS stood at Rs. 25.98, restated for comparability following a bonus issue during the year.
The fourth quarter was the standout period of FY26, both in absolute numbers and on trend. Net interest income for Q4 was Rs. 1,359 crore, up 25 percent year-on-year. Total income of Rs. 1,975 crore grew 24 percent, while operating expenses fell 5 percent including an 11 percent decline in employee expenses. Operating profit of Rs. 1,247 crore surged 49 percent year-on-year and 24 percent sequentially. Net profit for the quarter was Rs. 725 crore, up 41 percent year-on-year and 5 percent over Q3 FY26, translating to quarterly EPS of Rs. 7.50.
NIM in Q4 recovered to 4.25 percent (adjusted for the income tax refund interest), up 26 basis points from Q3’s 3.99 percent and 12 basis points below the year-ago quarter. The trajectory matters: after dipping to 3.77 percent in Q2 FY26, the bank has now staged a two-quarter recovery back above 4 percent, driven by a faster decline in the cost of deposits (down to 5.41 percent in Q4 from 5.74 percent a year earlier) than in the yield on advances, which contracted 28 basis points to 9.93 percent over the same period.
Balance Sheet and Loan Book Growth
Total business crossed Rs. 2.14 lakh crore in FY26, up 15 percent. Gross advances grew 17 percent year-on-year to Rs. 98,754 crore, while deposits expanded 13 percent to Rs. 1,15,666 crore. Corporate advances grew 12 percent to Rs. 13,494 crore, accounting for about 14 percent of the book. CASA grew 12 percent to Rs. 31,122 crore, though the CASA ratio dipped 36 basis points to 26.91 percent as term deposits outgrew low-cost funds. Borrowings nearly doubled year-on-year to Rs. 2,623 crore from Rs. 1,217 crore, likely reflecting refinancing activity and bond issuances to support the advances growth trajectory.
Asset Quality
The asset quality picture is among the cleanest in the bank’s recent history. GNPA declined to 0.75 percent from 0.76 percent a year earlier, while NNPA held steady at 0.19 percent, unchanged for the past four quarters. The total stressed assets book declined to Rs. 619 crore, or just 0.45 percent of total assets, from Rs. 703 crore (0.59 percent) a year ago.
Capital ratios improved during the year. CRAR stood at 18.76 percent in March 2026, against 18.17 percent a year earlier and a trough of 16.05 percent in December 2025. Tier I capital was Rs. 13,416 crore (17.72 percent) and Tier II Rs. 783 crore (1.04 percent). Risk-weighted assets grew to Rs. 75,697 crore, up from Rs. 66,261 crore consistent with the pace of advance expansion. The bank conducted a bonus issue during FY26, raising paid-up capital from Rs. 161 crore to Rs. 193 crore.
Business Overview
Karur Vysya Bank Limited is a century-old private sector bank headquartered in Karur, Tamil Nadu, with 901 branches and a national network spread across metro, urban, semi-urban, and rural centres. The bank offers commercial banking, retail lending, agriculture finance, treasury operations, and digital banking services.
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