Its total income during the April-June 2020 quarter rose to Rs 2,134.63 crore, from Rs 1,794.33 crore a year ago, it said.
The lender's operating profit during the quarter rose to Rs 677.04 crore, rising 93.43 per cent as compared with Rs 350.01 crore in the year-ago quarter, while the net interest income increased 8.19 per cent to Rs 535.12 crore from Rs 494.59 crore.
On the assets front, the Mangaluru-headquartered lender witnessed a slight increase in its gross non-performing assets (NPAs) to 4.64 per cent of the gross advances as on June 30, 2020, from 4.55 per cent by the end of June 2020.
Net NPAs were, however, down at 3.01 per cent from 3.33 per cent.
In absolute value, the lender's gross NPAs were at Rs 2,557.64 crore, up from Rs 2,437.53 crore. Net NPAs or bad loans were worth Rs 1,630.65 crore as against Rs 1,759.77 crore, it added.
Provisions for bad loans and contingencies more than doubled in the June 2020 quarter at Rs 509.07 crore, against Rs 201.14 crore in the same quarter of 2019-20.
The lender's capital adequacy ratio has further improved to 13.07 per cent as compared to 12.70 per cent by the end of June 2019.
The net interest margin improved to 2.89 per cent from 2.81 per cent.
Deposits of the bank grew 4.86 per cent to Rs 71,853.98 crore by the end of June 2020, while advances were up by 2.63 per cent to Rs 54,209.50 crore.
Business turnover was up by 2.89 per cent to Rs 1.26 lakh crore.
"Even though we are not an exception to many challenges and uncertainties triggered by the Covid-19 pandemic, this quarter turned out to be a dream quarter on account of all-time high quarterly net profit as well as operating profit," said Mahabaleshwara M S, managing director and CEO of Karnataka Bank.
He said it was possible mainly on account of various cost reduction measures, robust treasury profit and a decent growth in interest income on account of improved interest spread
Shares of Karnataka Bank closed at Rs 47.10 apiece on the BSE, up 3.52 per cent from the previous close.