Karnataka Bank Ltd (NSE: KTKBANK) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Unidentified Speaker
Raghavendra Srinivas Bhat — Managing Director & Chief Executive Officer
Analysts:
Unidentified Participant
Vinay Nadkarni — Analyst
Suraj — Analyst
Chirag Singhal — Analyst
Darshan Deora — Analyst
Sarvesh Gupta — Analyst
Priyank Chheda — Analyst
Varun Bang — Analyst
Piyush Chadha — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome TO Karnataka Bank Q3FY 2020 05:26 Financial Results Conference call hosted by Karnataka Bank. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing 0 on your Touchstone phone. Please note that this conference is being recorded. Mr. Raghavendra S Path, Managing Director and CEO from Karnataka bank who is on the line along with his top management team. Mr. Raja BS Chief Operating Officer Mr.
Chandrasekhar Chief Business Officer Mr. Vinaya Bhatt PJ Chief Compliance Officer Mr. J. Nagarajarao S, Head of Inspection and Internal Audit and Internal Vigilance Mr. Niranjan Kumar R, Chief Human Resource Officer Mr. Nagaraja Wadiya B, Head of Credit Sanctions Department Mr. Venkateshwaru Malineni, Head of Liability Sales and Third Party Products Mr. Vijayakumar PH, Chief Financial Officer Mr. Raghuram HS Head of Branch Banking Department, Product Department and Business Solutions Group, PSG and IT and MIS Department. Mr. Chandrasekhara Ji, Head of Credit Sanctions department Mr. Sham K, Head of Secretarial Department and Operations Department Mr. Sridhar S, Head of Credit Monitoring Department Mr. Manoj Kumar PV, Chief Risk Officer. I now hand the conference over to managing director and CEO. Thank you. And over to you Mr. Raghavendra S.
Raghavendra Srinivas Bhat — Managing Director & Chief Executive Officer
Pat yeah good evening and thank you for joining Karnataka Bank’s Q3FY26 earnings call. We appreciate the continued interest and engagement from our investors and stakeholders during today’s call. We will walk you through the Bank’s performance for the quarter ended 31 December 2025, outline the key financial highlights and share the strategic priorities ahead. Consistent with our approach since previous quarter, we have provided our investors sufficient time to review the financial results and investor presentation, both of which were uploaded following the conclusion of the board meeting held on 10th February 2006. As highlighted in the previous quarter, the first quarter of FY26 was a period of significant transition for the bank.
Q3 marks my second full quarter as the bank’s MD and CEO and I am pleased to share that we have built on the momentum and made steady progress in executing our strategy. By keeping our strategic focus intact, we have successfully navigated the transition phase, strengthened operational stability and laid the groundwork for sustainable growth. Our mission and vision requirements remain firmly anchored as we move ahead with renewed focus, reinforcing our commitment to disciplined growth, operational excellence and effective strategic execution in line with the bank’s long term objectives. Before getting into the financials, I would like to highlight that our approach during the quarter was anchored around three key priorities.
Number one Strengthening retail and MSME growth to build a more resilient and well diversified portfolio. 2. Optimizing funding costs by increasing CASA and reducing reliance on high cost bulk deposits. 3. Sustaining asset quality and provision coverage while maintaining a sharp focus on core profitability metrics such as nim. The banking landscape remains dynamic influenced by evolving macroeconomic factors such as interest rate movements and liquidity conditions. During Q3, the reduction in the repo rate put pressure on yields across the industry. In response, Karnataka bank recalibrated the the lending mix to protect margins while continuing to effectively serve the needs of the customers.
Our strategy remains clear. Retail, Agri and MSME or RAM segments remain the core drivers of our growth strategy. Corporate portfolio rationalization is continuing with continued focus on high yielding assets. Digital transformation initiatives are gaining momentum with new products and platforms being developed to enhance customer experience and improve operational efficiency. Let me now present the business highlights Aggregate Business stood at Rupees 1.81,394 crore as of December 31st 25th up by 3% Q on Q from 1.76,461 crore in September 25th PAT Q3FY26. PAT was Rupees 290.79 crore as against Rupees 319.12 crore in Q2FY26 there was a decrease of 9% YoY.
There is an increase in PAT from Rs. 283.60 crore in Q3FY25. Further in line with the bank’s commitment to increase PCR, the bank has committed making accelerated provisioning and the PCR presently stands at 61.23%. Gross advances stood at 77,000 to 82.85 crore as on 31st December 25th reflecting Q on Q growth of 5% from 73,644.15 crore to AS on 30th September 25th. Overall strategy is to continue to focus on growing retail, AGRI and MSME where the growth was led by MSME Housing and Gold loan portfolio with a net book accretion of Rs. 962 crore Q on Q.
The bank has been committed to reducing its exposure to low yielding corporate loans that were opportunistically deployed for better years than treasury as conveyed during the previous calls, we have started replacing IBPC book with higher yielding loans. IBPC portfolio as on 31st December 25th is at Rupees thousand 639 crore as against Rupees 1860 crore as on 30th September 25th. Accordingly, around 221 crore of IBPC advances have been replaced in Q3 on a Q on Q basis. Retail Agri and MSME segment in Q3FY26 has grown by 2% while mid corporate advances have grown by around 7%.
As we move forward we will be continuing the strategy of accelerating the retail growth while also stabilizing our corporate portfolio with good quality and better yielding loans. Aggregate deposits and as on 31st December 25th was at Rs.1.4111.52 crore as against 1.2817.19 crore as of September. CASA deposit stood at 31.53% of aggregate deposits as against 31.01% in September 25th. It is to be noted that in absolute terms our CASA deposits have grown 3% Q on Q over September 25th. CASA accretion continues to be a key priority for the bank and we have put in place a focused strategy to further accelerate CASA growth.
Over the course of the year the bank has continued to focus on shifting high cost bulk deposits to granular or retail deposits of less than 3 crore. Bulk deposits as a percentage of total deposits have come down from 5.3% as on 30 September 25 to 4.8% as on 31 December 25. Similarly, bulk deposits as a percentage of term deposits have come down from 7.6% as on 30th September 25th to 7.1% as on 31st December 25th. In line with this clearly articulated strategy, the the bank has consciously curtailed the acceptance of high cost bulk deposits with the majority of deposit renewals being carried out at a predefined card rates.
This approach has enabled the bank to exercise better control over its cost of deposits. Retail term deposits I.e. less than 3 crores have seen a growth from Rs. 65,531.80 crore as on 30.9.25 and to 66,252.24 crores as of 31.12.25. On a YoY basis, retail term deposits has grown by 6%. Our focused efforts on new product development and launches remain on track aimed at addressing bridging the remaining gaps in our product offerings. Launches planned in the coming quarters Agri Infrastructure Fund Exploring best opportunities under the scheme which includes assistance for creation of post harvest management infrastructure and creation of community farming assets to launch a dedicated product for lending to SHGs.
Ecosystem Taif is underway to scale up MSME including onboarding business facilitators, LSPs for electric vehicle Financing, Soulabya Deposit New variant with Partial Withdrawal Facility, Flexi Deposit Scheme, Supply Chain Finance and Tris Finance. Net Interest Income Net interest income for Q3FY26 stood at 792.06 crore as compared to 8.12 crore in Q2FY26 registering a Q on Q growth of 8.8%. Net interest margin stood at 2.92% for Q3FY26 as against 2.72% in Q2FY26 and 3.02% in Q3FY25. While the cost of deposit and cost of funds have declined, the fall in yield on advances has put some pressure on our NIM during the quarter.
However, supported by an increase in casa, reduction in share of bulk deposits of our cost of deposits has reduced from 5.54% for Q2FY26 to 5.43% for Q3FY26. Along with the added focus on the ramp segment, there has been an improvement in NIM during this quarter and we expect to see our NIM going back to the previous level of around 3% plus loan yields as a result of recent cut in repo rate owing to reduction in external benchmark rates partially offset by the changes in the product mix. Yield on advances for Q3FY26 stood at 8.71% as compared to 8.98% in Q2FY26 and 9.37% in Q3FY25.
As mentioned during the previous quarter, the bank remains committed to its strategy of replacing the bulky opportunistic advances with direct to corporate and retail advances. Considering the potential churn to higher yielding segments, we expect to see further improvement in the overall portfolio. CD ratio for the quarter stood at 74.23% as compared to 71.63% in September 25th and 77.84% in December 24th. Stress Assets Gross NPA percentage as on 31st December 25th to date 3.32% amounting to 2565.31 crore as against 3.33% in terms of Rupees 2453.10 crores in September 25th, thereby showing an improvement of 1 basis points.
The Gross NPA percentage as on December 24th stood at 3.11% I.e. 2419crores. Net NPA percentage as on 31st Dec 25th stood at 1.31%, amounting to 994.70 crore as against 1.35% I.e. rupees 975.96 crores in September 25th, there showing an improvement of 4 basis points. Net NPA percentage as on December 21st to debt 1.39% amounting to 1063crores. The quarterly improvement in both gross NPA and net NPA percentage shows our bank’s intensified efforts to control slippages and improve monetary efficiency through regional collection centers. Credit cost stood at 0.11% in Q3FY26 as against 0.03% in Q2FY26 and 0.12% in Q3FY25.
Gross slippages at 0.47% in Q3FY26 as Against 0.35% in Q2FY26 and Zero.40% in in Q3FY25. Recoveries for the quarter excluding upgraded accounts stood at Rs.114.18 crore in Q3FY26 versus rupees 193.25 crore in Q2FY26 and rupees 100.52 crore in Q3FY25. Standard restructured advances including related accounts Standard restructured amounts today at 867.95 crore as on 31st December 25th as compared to 939.35 crore as on 30th September 25th, registering a reduction of 7.6%. Q on Q. Standard restructured portfolio stood at 1113.65 crore as on 31st December 24th, around 55% of the restructured portfolio I.e. 477.37 crore comprises of loans that require a 30% recovery for upgradation.
Bank is focusing on recovering the same post which the same would be moved out of the restructured portfolio. These efforts underline the bank’s commitment to reducing the restructured portfolio provision. Coverage ratio including technical write off stood at 80.90% in December 25 as compared to 81.05% in September 25 and 80.64% in December 24 excluding technical rate of PCR improved to 61.23% as compared to 60.22% in September 25 and 56.03% in December 24 in line with the Bank’s commitment to improving PCR liquidity coverage ratio. As on 31st December 25th, LCR stood at 186.84% as against 188.16% as on 30th September 25th and as against the chartery target of 100%.
Cost of funds Cost of funds stood at 5.46% in Q3FY26 as compared to 5.58% in Q2FY25 and 5.69% in Q3FY25. The sequential Q on Q improvement in cost of funds is expected to continue in the coming quarters as the benefits of the cut in repo rate materializes. This would be further supported by our continued endeavors to reduce the the dependence on bulk deposits and replacing the same with retail deposits at card rates and focus on casa. Build up Cost to Income Ratio for the quarter ended 31 December 25, cost to income ratio stood at 58.72% as against 58.93% for the quarter ended 30 September 25.
The bank has undertaken multiple costs rationalization and monitoring initiatives undertaken by the bank in a bid to renegotiate rents, commercials and keep operating expenses under check. Owing to our reduction in composition of bulk deposits in total deposits along with our added focus on ramp segment, we should see an improvement in net interest income which which will favorably impact cost to income which is expected to come down to 55% in the coming quarters. Q3FY26ROE stood at 9.06% as against 10.14% in Q2FY26ROE Q3FY26 return on advance stood at 0.92% as against 1.03% in Q2FY26. We expect to end the year with a return on asset between 1.1% plus.
We expect ROA and ROE to further improve supported by higher accretion in the high yielding RAM segment and a gradual shift from bulk deposits to retail deposits. These factors are expected to drive an improvement in net interest income and consequently lead to an improvement in pat. I would like to reiterate that Karnataka bank is built on a strong foundation and is well positioned to capitalize on emerging opportunities. The progress we have made in strengthening our retail and MSME portfolio, optimizing funding costs and improving asset quality, provides a solid platform for sustainable growth in the coming quarters.
Our strategic initiatives ranging from digital transformation to targeted product launches, are firmly execution driven and designed to deliver measurable outcomes. As these initiatives gain further traction, we expect to see a steady improvement in margins, profitability and return ratios going forward. While the banking landscape continues to evolve, our resilience, agility and customer centric approach remain key differentiators. Supported by strong capital adequacy, healthy liquidity and a disciplined execution framework, Karnataka bank is well equipped to deliver consistent and long term value to all stakeholders. Thank you for your trust and continued support. I would now like to hand over the call to the moderator for any questions and feedback from our callers that we would be glad to take.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment. While the question queue is symbols, the first question comes from the line of Vinay Nathkarn with Hathaway Investments Private Limited. Please go ahead.
Vinay Nadkarni
Some bookkeeping questions. What percentage of advances you said are me?
operator
Sorry for interrupting, your voice is not clear. Can you come a little closer to the mic and speak?
Vinay Nadkarni
Yeah, can you hear me now?
operator
Yes, please go ahead.
Vinay Nadkarni
Yeah, just wanted to check out what is the percentage of EBLR or MCLR linked advances that we have.
Raghavendra Srinivas Bhat
Around 51%. Good afternoon. Sorry, can you hear me?
Vinay Nadkarni
Yeah, I can.
Raghavendra Srinivas Bhat
Yeah, around 51%.
Vinay Nadkarni
Okay. And how much of your deposits are. Still to be repriced downwards?
Raghavendra Srinivas Bhat
Sorry
Vinay Nadkarni
How much of your deposits are to be repriced downwards in Q4 because of the repo rate cut?
Raghavendra Srinivas Bhat
Because of the rate cut deposits are.
Unidentified Speaker
No floating deposit.
Raghavendra Srinivas Bhat
Yeah, deposits are fixed rate only. No, no floating rates because of the rate cuts. Nothing to do with the eblr and all deposits are fixed rate.
Vinay Nadkarni
Okay, and just one more question on you said you are focusing on MSMES and the RAMSEC portfolio but when I see an SMA 2 maximum outstanding is coming from these three segments including housing loans. So is there a stress there that we are going to encounter as we grow this RAM book?
Raghavendra Srinivas Bhat
No, see MSME it was there. No doubt about it. A portion of MSME is mainly because of cma, mainly because of renewals we have. In total it was reduced from almost 10.2% to 7.6%. And because of continuous efforts of follow up and all and the renewal of working capital facilities we don’t foresee any much threat and it is under control.
Vinay Nadkarni
Okay. And this last question on housing loans you seem to have. These are all secured loans, right? So still there is a. Yeah. Still in SMA2 you have a sizable portion of housing loans standing there. Around 27%. So why is this delay happening in. I mean is there any particular reason?
Raghavendra Srinivas Bhat
Housing. No, no. Housing loan. 27%. From where you got that? I don’t know. It will be clarify to you separately. There is no housing loan. There is no 27% such setup.
Vinay Nadkarni
Okay. This is. I’m looking at your slide number 22 where you have mentioned special mention account breakup for Q3FY26. Housing is 26.9%. So I assume that.
Raghavendra Srinivas Bhat
No, no. I will clarify to you. As far as housing loan sector is concern, there is no 26. I don’t know some. I have to check back and I will revert back to you.
Vinay Nadkarni
Okay, thank you very much. I’ll join back in the queue.
Raghavendra Srinivas Bhat
Yeah.
operator
Thank you. Next question comes from the line of Suraj with Info Edge Ventures. Please go ahead.
Suraj
Yes. Good afternoon to all. As I’m able to see that the. Bank has been able to achieve the. CD ratio of 74% going next. How are we planning to improve it further?
Raghavendra Srinivas Bhat
Yeah. Good afternoon, Suraj. Yes. It is a continuous effort of increasing the CD ratio. As I told you earlier also continuously we are focusing on retail and retail segment ramp. And as I mentioned earlier also here comes housing, MSME and gold and. And gold loan also during the current financial year has shown substantial growth. So also we have revised the rate of interest on housing loan and MSME loans. And we are now at a competitive rate of interest also taking all these things into account. This growth started coming from October onwards. Along with the this RLP retail centers started in all 15 centers.
And additional delegated powers to the regional heads. All these are contributory for growth. Growth actually started coming from October onwards. Taking into account all these factors I am quite confident that which has gone negative over March till September now positive traction has started coming. Definitely. I am quite confident that going forward in the remaining months this growth will be further stepped up. And it will show better results in the coming quarters.
operator
Thank you, Mr. Suraj. Please rejoin the queue for more questions. Next question comes from the line of Mr. Pankaj, an individual investor. Please go ahead.
Unidentified Participant
Hello. Sir, good afternoon, this is Pankaj. Sir, I would like to know two points. Number one, gross NP has increased from 3.11 to 3.32% year on year. What would be the behavior of stress accounts in future and whether any stocks expected ahead. Number two, what is the strategy for future retail agriculture and MSME improvement and branch expansion? Sir.
Raghavendra Srinivas Bhat
Yeah, Pankaj, good afternoon. With regard to gross NPA I had better plans of controlling the stress as well as NPA in the earlier quarter. I said this quarter also it was very much under control because of one particular account. This time the efforts with regard to controlling has come in the way of negative to the bank. And in this particular case also single account. Big, big amount of big borrower account. I am quite confident it is fully backed by very good security in the prime location. I am quite confident that recovery action already started and recovery process.
You know if it happens before 31st a big boost to the recovery of the bank and which will be very much under control. Otherwise. With regard to NPA which is very much under control because our focused attention for recovery as well as follow up of advances through CRMDs and CRMT and with regard to agreement. Agree. Agree. You mean to say this is agree. You are asking about the target or I mistake improvement.
Unidentified Participant
I would like to know about the.
Raghavendra Srinivas Bhat
As far as agree improvement. We have very much on track and we have surpassed the target fixed by the regulator. It is almost as against the target of 18%. We have crossed that 18%. However with regard to the subsectors under AGRI we are little bit shortage and we are making all out efforts to ensure that this target is achieved. Under that subsectors of small farmers and marginal farmers. Overall agree we have achieved.
operator
Thank you Mr. Pankaj. Please rejoin the queue for more questions. Next question comes from the line of Chirag Singhal with first Water Fund. Please go ahead. Thanks for the opportunity.
Chirag Singhal
So my first question is on the NIMS. So we saw a very good improvement. Almost 20 basis point improvement sequentially. Now with no fresh rate cuts. Is it fair to assume that 3%. Plus NIM is achievable in Q4?
Raghavendra Srinivas Bhat
Yeah. See as I mentioned earlier to the earlier caller. We have all strategies in place. This growth started coming from October onwards. And going further, this growth is continuously happening in all 15 centers. As well as the higher amount of exposure taken up by the head office. Growth is continuously happening. Number one, one is growth, other one is the recovery efforts. These both going together will add value.
And my continuous efforts on recovery as well as controlling stress and growth. This will definitely give better yield in the coming days. And I am hopeful that it will be three plus during the quarter and it will happen because there is an improvement which you have seen. Added to that this all has happened as I mentioned earlier this EBLR effect where the assessor getting repriced faster liability side is fixed. With all these focus on CASA everything definitely it will be 3% plus by the year end.
operator
Thank you Mr. Singhal. Please rejoin your queue for more questions. Next question comes from the line of Yashwantipaswamy an individual investor. Please go ahead.
Unidentified Participant
Hi sir, good afternoon. Hello.
Raghavendra Srinivas Bhat
Yeah, good afternoon Tipeshwamy. How are you?
Unidentified Participant
I’m good, I’m good. I hope you are also doing good. So my first question is with respect to gross npa. So there is. I mean industry standard. If you see the sector average of GNP for MSMEs know has improved from like 1% to 4% now. But with the Karnataka bank we are still staying around at 8% as you said. You know, answering another caller.
Raghavendra Srinivas Bhat
Yeah,
Unidentified Participant
so. So are there any special focus that has been placed in order to improve on that front? That is first question and the second question is what are the you know sectors or industries in MSME that is you know causing this kind of no high, you know GNPAs because the slippage is comparably higher when we compare no quarter on quarter basis or the sequentially like from four quarters.
Raghavendra Srinivas Bhat
Yeah. For the question this as I mentioned earlier it was at 10.2%. You are right it it was brought down to 7.6%. Continuous efforts will be there in improving further in reducing the stress and further slippage to the NPA. Number one. Number two, in the case of by and large our facilities are adequately secured by the collaterals if not hundred percent. Some collateral backups there. That is number one.
But the sectors as you asked mainly contractors, manufacturing and service here mainly because of cash flow it is affecting sometimes and the borrowers are in touch with by the controlling office and these teams as I mentioned earlier in understanding the problem and timely redressal of the problems if any otherwise this problem this improvement could not have happened. And I mentioned contractors is around 2.1%. Stress level reduced to 2.1% and manufacturing 2.3%. Service sector 3.2% it is reduced to 7.6%. Our efforts will be continuously on that to further reduce this should bring down by the end of this quarter 5% or below 5%. We will work on it.
operator
Thank you Mr. Tipeshwamy. Please rejoin the queue for more questions. Next question comes from the line of Darshan Theora from Indwest Group. Please go ahead.
Darshan Deora
Yeah, thank you for the opportunity. I had a question on the NIMS. So just looking at slide number 12. I see that on a Q or. Q basis the NIM has gone up by about 20 basis points. But the yield on advances has gone down more than the cost of funds by about 15 basis points. I see the CD ratio has gone up. So is it fair to say that a lot of the improvement in NIM was because of the increase in CD ratio for this quarter?
Raghavendra Srinivas Bhat
One is as you rightly mentioned improvement in the CD ratio number one. Number two, we are very cautious with regard to the cost cost of deposit also. And by focusing on casa. CASA improvement is also there with all these efforts. And as you mentioned CD ratio and better yield advances like this retail otherwise this wholesale advances we have reduced the liability under IBPC that are yielding lesser advances. All these are contributory factors which we are working out in regular alcohol meeting also. Discuss and deliberate and finally take decision which will contribute.
operator
Thank you. Mr. Deora, please rejoin the queue for more questions. Next question comes from the line of Sarvesh Gupta with maximal capital. Please go.
Sarvesh Gupta
Question. So first
operator
Mr. Gupta, sorry for interrupting. We cannot hear you. Can you come a little closer to the mic and speak?
Sarvesh Gupta
Hello.
Raghavendra Srinivas Bhat
Hello.
operator
Yes, please go ahead.
Sarvesh Gupta
Yeah.
Raghavendra Srinivas Bhat
Not audible. Sorry, it is not audible.
operator
Mr. Gupta, please come in the range and talk.
Sarvesh Gupta
Hello.
Raghavendra Srinivas Bhat
Hello. Now it is audible.
operator
Mr. Gupta, we cannot hear you. Since there’s no reply from the line of. Mr. Gupta will promote the next. The next question comes from the line of Priyank from Volume capital. Please go ahead.
Priyank Chheda
Yeah. Hi sir. I hope I’m audible.
Raghavendra Srinivas Bhat
Yeah, very much. Good evening Priyank.
Priyank Chheda
Hi sir. How are you? I’m good. I hope you are doing well because I won’t get another chance by operator. I would request you to take down the list of questions that I have. And I won’t take it much long. I just want your brief broader guidance is to touch base again for a betterment of the public audience. In terms of loan book. You had a. You had guided that you would grow to the size of say at least 77,000 crores by 85,000 crores by end of FY26. Where are we? How would we progress? The second question on the CD ratio.
You are surely improving it quarter on quarter. We had a target to reach 80% by Q4. What would be that aspirations and how it stands for next year on the nims, you are surely again improving and you’re walking the talk. What you had given out in your first conference call just to reassure for the public what would be that NIMS going ahead with the exit of this year as well as for the next year. One in this whole aspect which is just a missing point is cost to income which is at 55 which you had guided for a 55% and a better recovery, better improvement which is not yet visible.
So your comments on that. Lastly on the provisioning front, should we consider 100 crores per quarter as a minimum requirement just for our aspirations to improve the PCR ratio by 100bps every quarter is what we had guided. Now how should we look that for next quarter and for the coming year you had guided for technical recovery loans recovery from the technical written off book. Whereas we this quarter we couldn’t get much income from the written off book. The clarification on the restructured account which had slipped last quarter up to 100 crores has that been recovered? If yes, then why the restructured book has just fallen by 70 crores versus a hundred crore recovery that should have come.
And finally on the ROA front you have been very much vocal to have an aspirations of ROI of more than 1%. After a long time we have slip down that number. Would you call it one off and would you yet call it out to be a 1% target to be crossed in the coming quarters? That’s all. Thank you. I hope you had noted on all the questions.
Raghavendra Srinivas Bhat
Yeah. Good evening Priyan. I think it is one member question or seven members question. Yeah. Anyhow, in a later way as. As I told you walking the talk is always important and we are doing that. We are. Whatever promises have been made, we will try to achieve it. Number one. Number two, to give you comfort advances figure of March 25 was at 78,000 which has dropped to 71,000. From there it started picking up. Today we are at 78,000 plus and we have got a sanctioned facilities of around 4,000 crores. Even if I take 50% or 75% because there are stages, disbursement, all those things are there.
Just because sanctioned facilities are there we cannot disburse around 2,500 to 3,000 crores. Disbursement will happen. We are at 78,000. As I said 3,000 crores will come from there. Around 1500 crores are coming from Gold loan. Gold loan. After September started picking up 1500 crores. 1500 crores we have added daily growth is happening there and housing loan. As I told you in my meeting also in the investors meet in Mumbai. This finer rate of interest we have done for housing, retail, MSME and a couple of other areas. New products also have been added. Taking all those things into account, around 3000 crores.
I am hopeful it will come from there. 85,000 crores is my target. And my team is working in all the 15 regional centers as well as head office. Sufficient leads are also there. And in principle clear proposals are also there. We are behind the people who have submitted the proposals for in principal clearance. All these things are simultaneously happening. And with regard to this disbursement, if it is happening at the flag end of the year, the entire interest income I may not get it in the current quarter. But whatever is sanctioned and happen, this disbursements are happening during the month and in the month next month definitely it will add to interest income.
Number one. Number two CD ratio 80% you have said. No doubt it is a task ahead. Before us. One is growing on the asset side. Other one is when we are growing equally on the library side. 80% may not have control. But if keeping the liability side on one side intact. If the asset growth only is happening. But for a bank we have to grow on both the sides. I am having assured 80% somewhere between 76 and 80. I will be there definitely. And I want growth on both the sides. Because my focus is on casa.
Since I am focusing on casa, my overall yield also what you call spread everything cost controlling. Because of improvement in casa, improvement in Nim Nim has shown improvement. As you are observing. Over Q3, over Q2, Q3 there is improvement. Further improvement will happen. 1% plus definitely will happen. That is number three. Number four cost to income. Yes, consistent efforts are there to reduce. You are seeing based on the Q1, Q2, Q3, Q4 of last year. If you see it was highest continuous efforts are on. It is improving quarter by quarter with the increase in the income.
Definitely cost to income ratio will be very much under control. I am hopeful between 55 to 56. At that range it should come. If everything goes well then provisioning. Yes, we are committed and we want to improve this position of PCR continuously. If you are. If you are seeing this PCR in last year. Q4 of last year, how many? 58. From there it is continuously improving. And every time there is improvement, we want to have the better financials continuously based on this we are improving and it should be possible for us. Then with regard to technical written off or total amount Recovered from technical return of IS recovery during the Q3 43 crores has been record which is straight away adding to the income in the Q4 also in the Q4 also some are.
Some proposals are in the advanced stages where discussions are happening. I am quite optimistic. Between 75 to 80 if is happening 100 is very good. 75 to 80 should happen. And with that it will be definitely adding to improving the cost income ratio and other important ratios. Also. With regard to the restructure advances, with regard to the restructured advances, there is a continuous improvement over marked restructure advances as on March 25th was 994 crores and improved to 939 crores. Further improved to 86.7 crores.
And as far as restructuring NPA is concerned it was 549 crores as of 3-25-11 crores and further reduced to 393 crores. Both put together out of the total restructure advances of 1544 crores as of March. Now it is 1261 crores. Continuous improvement is happening. I am quite optimistic that it will further improve. And the upgradation by collecting that 30% it will further improve in the restructured portfolio. Then Roe As I already told you with these continuous efforts. Improvement in the CD ratio, improvement in the cost control through CASA improvement and recovery. This ROA 1% plus by the end of this month. I am quite optimistic. I think I have answered all the. If I have anything omitted, please think whatever I have noted, I have told Priyank.
operator
Thank you Mr. Priyank. Please rejoin the queue for more questions. Next question comes from the line of Sunil C. Chopsy. Please go ahead.
Unidentified Participant
Team Karnataka replies. I’ve heard whoever has asked questions. I have a very simple question. So I take you back four years. Back when our market cap was 500,000 crores higher than South Indian Bank. Thousand crore below Karur Asia bank and more or less on par with City Union and other peer banks. If you look at the differentiation, Karur is four times, City Union is two times, South Indian is one and a half times and even Tamil Nadu is one and a half times our bank size. Our asset book advances to all other ratios is not reflecting. Something has gone right in these centers. I understand there’s a management change. But when do I see that slumber is over. The team Karnataka is over. I understand sir. You’ve come in dream. But I expect if you can talk on behalf of the team.
Raghavendra Srinivas Bhat
Yeah. Good evening Sunit Shakshiji. Thank you for coming online. Thank you for your seeking clarification also yes, you are right, market cap is one thing which if the financials are really good, market cap will automatically go up. And this is coupled with so many reasons. One is poor CD ratio or poor interest income net interest income return this NPA under control all these things ultimately adding value to the earning of the bank. That is why in the first meeting itself I told you and all other my investor colleagues or friends whosoever who are very very well supporting us taking into account the long term interest of the organization.
I was telling that unless and until we improve in the quality of advances and loan growth or the CD ratio if it is not less than 80% around 9 to 10 ratios will go bad. So I started focusing from there onwards immediately after taking over charge. And as you rightly observed, all these strategies coming into effect post October only the refining of rate of interest, delegation of powers to the retail centers in the respect 15 regional offices number two retail focused attention in all these 15 centers all these started yielding result. Now therefore the CD ratio started showing improvement and the focused attention till Q2 the whatever we call rank Everywhere the figures were read rather negative and the book the Figures as of 31 March over 31 March in September Everywhere there was red is highlighting.
Today I am seeing green going forward green light will be there. No doubt about it. Because I am optimistic and quite confident. My team is working very hard in the head office Also in all 15 regional centers also with regard to the growth of credit number one. Number two, like this growth, my team, CASA team and TPP team are working across India focusing on onboarding fresh customers and going forward which will add benefit with regard to the better pricing, cost control. These two are also happening. Number three, my CRMD team at head office they are in touch with the borrowers particularly bigger advancers.
They go to the field, they understand the customer. Sometimes though they are from crmd they on their visit they visit other borrowers also market potential they encase that benefit also. Likewise CRMD team is there in the regional office. They also started working by visiting to the field. Last but not the least arms in all centers these are targeting recovery of npa. That is why I was very much optimistic in the Q3 as far as NPA is concerned. You must have seen our past Q1 and Q2 it was improving suddenly. One particular account as I mentioned has swallowed all our efforts of recovery under other area that also I am quite confident.
As I mentioned earlier, it is a very good Asset in the prime location. Therefore I am quite confident that recovery is happening there also. Once it is happening, this reversed unrealized interest also will be coming back to the income. With all these things, the NIM will improve, ROE improvement. Everything will improve. Along with that when the earnings are good, market cap also will improve.
operator
Thank you.
Raghavendra Srinivas Bhat
Next question. Sorry, whether disconnected. Can I continue?
operator
Thank you. Continue
Raghavendra Srinivas Bhat
Along with that. You said when I see this brighter day ahead. Yes, it is a effort continuous effort required. Required. With that definitely we have lost ground with the comparable other banks. We will be bouncing back and at the earliest possible time. I cannot commit you right Now. Once this Q4 is over, I will have a proper strategy how to do it When I can, I will definitely come back to you. Thank you very much.
operator
Thank you. Mr. Jocksy. Please rejoin the queue for more questions. Next question comes from the line of Varun Bang with Bandhan life insurance. Please go ahead.
Varun Bang
Thanks for the opportunity, sir. I have three questions just so basically first is on the from the leadership standpoint, do you believe the management and the key functional teams are now in place or there are areas where additional talent or restructuring is required? That’s question number one. Question number two is in terms of your key focus areas. What are your key focus areas as you look to drive the execution over next couple of quarters. And third is in terms of the key challenges that you are facing at the moment as you have as you basically focus to deliver the stated guidance. Stability management stability focus areas and challenges. The three questions if you can answer. Yeah, thanks.
Raghavendra Srinivas Bhat
Yeah, Good evening. Regarding management stability, I feel and I have clarified also. Yes. Why you are asking that question Also I am fully aware earlier also I have clarified that is with regard to the leadership there is no problem because I have clarified in the earlier con call also in our one to one meeting also even earlier when when there was change in the management there were they were sufficiently backed by a equal capacity or skilled people As a second line it was there and continuous. You have seen some changes have happened during the current year.
Also in the key position that were all represented and with the equal number of talent and results started coming. That is, I am confident there is no threat. I guarantee absolutely there is no problem. It is sufficient backup is there. It is going on well. Regarding focus area, as I told you earlier and again I am repeating the retail retail mid corporates, retail everything MSME housing and gold loan and added to that mid corporate where diversified risk is there, diversification is there, focused attention is there, yield is slightly better somewhat collaterals Are available. Taking that into account mid corporates and as I told you earlier these corporates where the yield is less and risk is also more without collateral and all and very carefully bank is after analyzing so many things rating very carefully.
We are taking the exposure There focus is again big corporates and retail with that growth is happening. I think if you have gone through the presentation which I have made available to you. All the growth started happening and continuous inflow in all these retail 15 centers as well as higher ticket advances it is coming to head office. Fortunately one more analysis is I have seen the ticket size also has gone up. Both in housing in mid corporates everywhere ticket size has gone up. I am quite optimistic taking all these things into account that this retail and gold and mid corporate.
The growth will come in the remaining period or immediately next. Because of our strong marketing team which is working in the ground. All this will add value. Secondly some understanding with tobacco Corporation some major tie up breakthrough has happened there also we are focusing our advances. All these ultimately small small efforts will turn out big. And I am quite confident that also will happen.
Then challenges as you asked as every banker is having we are also having one is competition with our improved tat. We have to make it and we are we cannot ignore compliance and quality in the advances. We have put taken adequate steps. When retail is growing. The follow up action also need to be improved. For that auditors are also concurrent. Auditors also have placed in all the 15 centers even in head office also all these collective efforts put together challenges have been met with mitigating factors. I am quite sure that all these will produce best results going forward.
operator
Thank you Mr. Bang. Please rejoin the queue for more questions. The last question comes from the line of Piyush Chadha with Share India. Please go ahead. Mr. Chadha, please go ahead with your question.
Raghavendra Srinivas Bhat
Yeah.
Piyush Chadha
Yes. Just wanted some guidance on what you see as longer term growth and ROA targets. I know that your immediate urgency is to get to something like 84, 85,000 crore balance sheet end of this financial year and a 1% plus ROA. But say if we were to look. At slightly longer term 27, 28. What kind of growth rate do you. Think you can sustain in your assets and what kind of ROA would you target on a slightly more longer term basis?
Raghavendra Srinivas Bhat
Yeah. Good evening Mr. Peyush. As I was mentioning earlier also I am still stand by whatever I have committed earlier. One is I have to focus on overall growth of 15% business. 15% business means I am focusing for growth in advances between 15 to 20% and growth in liabilities between 10 to 15% overall growth will produce around 15% business I want to commit going forward as a long term plan and immediate. As I told you earlier, my immediate target is Q4 because the actual business started happening from Q3 beginning only so long term plan. Since you asked, I am telling you overall growth in business is around 15%.
And this I mentioned earlier ROE of 1% plus. If you ask me 1% plus what means immediately my plan of 31st March it should be 1% plus going forward. Next year 1.1 to 1.2 third year 1.2 to 1.3. It is a step towards like this and spread also 3% plus immediate going forward I have to further improve depending upon so many other factors. Growth, challenges. All these things come into picture. Taking all these things into account, my immediate plan of action is like this. I am moving in this direction immediately. Next month again I will revise that. Revise in the sense I have strategies and other things marketing. Everything I will plan by the end of March I will be the picture will be very clear. Based on that I will work further to improve all these strategies.
operator
Thank you ladies and gentlemen. That was the last question for today and due to time constraints we have reached the end of question and answer session. For any queries you may reach out to EY team. I would now like to hand the conference over to Mr. Raghavendra s path for closing comments.
Raghavendra Srinivas Bhat
Yeah. Thank you all the gentlemen who have come online and wanted to know so many things. Thank you for the opportunity also to me to interact with you. I will be more often interacting with you. I am assuring you that I will be interested to discuss with you in person also whenever I am in Mumbai or elsewhere. Wherever it is convenient. Number one. Number two, it is a commitment from this my side that whatever some gentleman has told walking the talk. We always do that. We are committed to that and what best service is also possible. All these things ultimately will produce the best results to the bank and increasing the value of our stakeholders also. Thank you very much. One and a half.
operator
Thank you on behalf of Karnataka Bank. That concludes this conference. Thank you for joining us. You may now disconnect your lines.