J&K Bank Reports Q2 FY2026 Profit Growth Despite Challenges, Revises Guidance

Jammu & Kashmir Bank (J&K Bank) has reported a net profit of INR 494.00 crore for the quarter ended September 30, 2025, marking a 1.9% sequential growth despite facing challenges. The bank's performance shows resilience in the face of recent disturbances and natural calamities affecting its core geography.

Key Financial Highlights

Metric	Q2 FY2026	QoQ Change	YoY Change
Net Profit	INR 494.00 crore	+1.9%	-
Deposits	-	+2.4%	+10.2%
Advances	-	+3.9%	+9.4%
CASA Ratio	45.89%	+18 bps	-
Gross NPA	3.32%	Reduced	-
Net NPA	0.76%	Reduced	-

Deposit and Advance Growth

J&K Bank witnessed a deposit growth of 2.4% sequentially and 10.2% year-on-year, while advances grew by 3.9% sequentially and 9.4% year-on-year. The bank's performance aligns with the overall banking sector trends, as per the latest RBI data.

CASA Ratio Improvement

A notable achievement for the bank this quarter was the improvement in its CASA (Current Account Savings Account) ratio, which increased to 45.89% from 45.71% in the previous quarter. This marks the first improvement in nine consecutive quarters, contrasting with the industry-wide trend of declining CASA ratios.

Regional Performance

The bank's Rest of India (ROI) book recorded a year-on-year growth of 16.1% in advances, compared to 5.9% growth in Jammu and Kashmir and Ladakh. This aligns with the bank's vision of achieving a 50-50 split between JKL and ROI in its loan book over the medium to long term.

Sector-wise Growth

Corporate and Agriculture sectors, constituting about 40% of the bank's loan portfolio, were the best performers with year-on-year growth of 11.7% and 27.4% respectively. The Personal Finance segment, making up 38% of the loan book, grew by 6.9% year-on-year.

Profitability and Margins

While profitability moderated on a year-on-year basis, in line with industry trends, the bank still managed a sequential improvement. However, the Net Interest Margin (NIM) contracted to 3.56% from 3.90% in the same period last year, primarily due to faster transmission of rate cuts on the lending side.

Asset Quality

The bank's asset quality showed improvement, with Gross Non-Performing Assets (GNPA) reducing to 3.32% and Net NPA to 0.76%. The Provision Coverage Ratio remains healthy at above 90%.

Special Provisions and Guidance Revision

J&K Bank made an impairment provision of INR 92.00 crore this quarter and INR 87.00 crore in the previous quarter, totaling INR 180.00 crore, for its investment in Jammu and Kashmir Grameen Bank following its merger with Ellaquai Dehati Bank. This one-time provision has led the bank to revise its guidance for Return on Assets (RoA) to 1.20%-1.25% and Return on Equity (RoE) to 15%-16% for the current financial year.

Outlook

Despite the challenges, J&K Bank maintains its credit growth guidance at 12% and deposit growth at 10% for FY2026. The bank aims to bring its Gross NPA below 3% by the end of the fiscal year and expects to maintain a CASA ratio of 48%.

Managing Director and CEO Amitava Chatterjee expressed confidence in the bank's performance, stating, "As an investor, you won't be disappointed. And it [profit] will definitely be better than what we have recorded last year."

The bank's focus on CASA growth, retail credit expansion in Rest of India, and strategic initiatives are expected to support its performance in the coming quarters, despite the challenges posed by recent events in its core geography.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.31%	-3.97%	-9.56%	-4.18%	-2.48%	+353.73%

Jammu & Kashmir Bank Limited has announced its financial results for the second quarter of fiscal year 2025-26, showcasing a steady performance amid challenging economic conditions.

Key Financial Highlights

Net Profit: The bank reported a standalone net profit of Rs 494.11 crore for Q2 FY2026, compared to Rs 484.84 crore in the previous quarter and Rs 550.92 crore in the same quarter last year.
Total Income: Total income for the quarter stood at Rs 3,446.71 crore, up from Rs 3,419.63 crore in Q2 FY2025.
Net Interest Income: The bank's net interest income (NII) remained relatively stable at Rs 1,433.99 crore, compared to Rs 1,435.93 crore in the same quarter last year.
Asset Quality: Gross Non-Performing Assets (NPA) ratio improved to 3.32% from 3.95% year-on-year, while the Net NPA ratio decreased to 0.76% from 0.85%.

Business Growth and Operational Performance

The bank demonstrated growth in key business parameters:

Deposits: Total deposits increased by 10.2% year-on-year to Rs 1,52,030.16 crore.
Advances: Net advances grew by 9.4% to Rs 1,05,153.30 crore.
Business per Employee: Improved to Rs 20.92 crore from Rs 18.52 crore in the previous year.

Capital Adequacy and Liquidity

J&K Bank maintained a strong capital position:

Capital Adequacy Ratio: Stood at 15.27% under Basel III norms, up from 14.99% in Q2 FY2025.
CET1 Ratio: Improved to 12.11% from 11.66% year-on-year.

Management Commentary

Mr. Amitava Chatterjee, MD & CEO of J&K Bank, stated, "Our Q2 results reflect the bank's resilience and strategic focus on sustainable growth. The improvement in asset quality and steady increase in business volumes demonstrate our commitment to creating value for all stakeholders."

Future Outlook

The bank continues to focus on improving asset quality, expanding its retail and MSME portfolio, and leveraging technology to enhance operational efficiency. With a strong presence in the region of Jammu & Kashmir and increasing footprint in other strategic areas, J&K Bank is well-positioned for future growth.

Conclusion

Jammu & Kashmir Bank's Q2 FY2026 results indicate a stable performance with improvements in key areas such as asset quality and business growth. The bank's strategic initiatives and strong regional presence provide a solid foundation for sustained performance in the coming quarters.