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Three Mid-Cap Banks Report More Than 20% Loan Growth
Three mid-sized Indian banks said they lent a lot more money in the July-to-September 2026 quarter than a year earlier.
Their loans grew by more than 20%.
Dhanlaxmi Bank saw especially strong growth in gold and small-business loans.
Karnataka Bank and Jammu and Kashmir Bank also reported higher lending and deposits.
The article says these banks’ shares are valued more cheaply than shares of HDFC Bank and Kotak Mahindra Bank using one measure.
It also points out that the mid-sized banks have much smaller loan books.
The writer expects demand for loans to rise during the upcoming busy credit season.
Investors are advised to assess the banks’ future performance rather than assume that growth will continue.
Dhanlaxmi Bank, Karnataka Bank and Jammu and Kashmir Bank reported year-on-year loan growth above 20% in the September 2026 quarter.
Dhanlaxmi Bank’s advances rose 22.29% to ₹15,948 crore, led by growth in gold and MSME loans.
Karnataka Bank’s advances grew 24.9% to ₹92,014.58 crore, while Jammu and Kashmir Bank’s rose 23.72% to ₹1.33 lakh crore.
The three banks reported price-to-book ratios of 0.8 to 0.9, compared with 1.9 for HDFC Bank and 3.2 for Kotak Mahindra Bank.
The article says the banks may benefit from the busier credit season ahead, while noting their loan books are much smaller than those of the larger banks.
- Who
- Dhanlaxmi Bank, Karnataka Bank and Jammu and Kashmir Bank.
- What
- The banks reported year-on-year loan growth above 20%, alongside growth in deposits.
- Where
- India.
- When
- The September 2026 quarter, the second quarter of FY27.
- Why
- The article attributes lending growth to areas including gold, retail, MSME, corporate and agricultural loans; it also says the banks may benefit from the upcoming busy credit season.
Growth and lower valuations
Scale and investment caution
How to interpret the valuation gap
Growth and lower valuations
The three mid-cap banks reported loan growth above 20% and traded at price-to-book ratios of 0.8 to 0.9, well below HDFC Bank and Kotak Mahindra Bank.
Scale and investment caution
The article notes that the mid-cap banks’ loan books are only a fraction of the larger banks’ and frames future performance as something investors should monitor, not assume.
Growth outlook
Growth and lower valuations
The article expects the banks to continue strong double-digit loan growth during the busy credit season, potentially outpacing larger peers.
Scale and investment caution
That outlook is an expectation, not a reported result; the article advises readers to see whether performance matches expectations and to make independent investment decisions.
Key facts
- Reporting period
- September 2026 quarter (Q2 FY27)
- Dhanlaxmi Bank advances
- ₹15,948 crore, up 22.29% year on year
- Dhanlaxmi gold loans
- ₹6,823 crore, up 53.4% year on year
- Karnataka Bank advances
- ₹92,014.58 crore, up 24.9% year on year
- Jammu and Kashmir Bank advances
- ₹1.33 lakh crore, up 23.72% year on year
- Price-to-book ratios
- Dhanlaxmi Bank 0.8; Karnataka Bank 0.9; Jammu and Kashmir Bank 0.9; HDFC Bank 1.9; Kotak Mahindra Bank 3.2
- Return on equity
- Dhanlaxmi Bank 7.15%; Karnataka Bank 10.4%; Jammu and Kashmir Bank 15.2%; HDFC Bank 14%; Kotak Mahindra Bank 11.1%
Sources
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