Jammu & Kashmir Bank has reported its highest-ever first-quarter net profit of Rs 485.00 crore, marking a 16.7% year-on-year (YoY) growth. This impressive performance comes despite a one-time impairment provision that impacted the bank's profitability.

Key Highlights

• Net profit grew 16.7% YoY to Rs 485.00 crore
• One-time impairment provision of Rs 87.00 crore related to J&K Grameen Bank investment
• Deposit growth of 12.1% YoY, outpacing industry average of 10.1%
• Loan growth muted at 6.1% YoY with a 2.7% decline in Q1
• Operating income increased by 9.7% YoY

Profitability and One-Time Provision

The bank's profitability was impacted by a one-time impairment provision of Rs 87.00 crore related to its investment in J&K Grameen Bank. This provision was necessitated due to the amalgamation requirements under the 'One State One RRB' concept. Notably, excluding this provision, the bank's net profit growth would have exceeded 30% YoY.

Deposit and Loan Performance

Jammu & Kashmir Bank achieved an above-average deposit growth of 12.1% compared to the industry average of 10.1%. However, the CASA (Current Account Savings Account) ratio declined from 47.01% to 45.71% as customers migrated to term deposits for higher yields.

Loan growth remained muted at 6.1% YoY, with a 2.7% decline in the quarter. This was attributed to flat corporate lending and scheduled repayments. Personal Finance and Agriculture sectors, contributing around 50% of the loan book, grew by 7.4% and 19.9% YoY, respectively.

Financial Metrics

Outlook and Guidance

Despite the challenges, Jammu & Kashmir Bank maintains its FY26 guidance, except for a downward NIM revision to 3.65-3.70% following the Reserve Bank of India's 50 basis point rate cut. The bank remains confident in its strong fundamentals and strategic priorities.

Management Commentary

Baldev Prakash, MD & CEO of Jammu & Kashmir Bank, stated, "We've begun the new financial year on a strong note, delivering another consistent performance. This reflects the strength and resilience of our Institution, the unwavering commitment of our teams, and the continued trust and support of our stakeholders."

The bank's performance demonstrates its ability to navigate challenging circumstances while maintaining growth and profitability. As Jammu & Kashmir Bank continues to evolve, it remains well-positioned to deliver consistent performances and create long-term value for its shareholders.

Jammu & Kashmir Bank (J&K Bank) has reported a robust financial performance for the first quarter, with a significant increase in net profit and improved asset quality.

Strong Profit Growth

The bank posted a net profit of ₹484.84 crore for the quarter, marking a 16.7% year-on-year (YoY) increase from ₹415.49 crore in the same period last year.

Key Financial Highlights

• Net Interest Income (NII) grew by 7% YoY to ₹1,465.43 crore
• Operating Income rose 9.7% to ₹1,715.73 crore
• Return on Assets (RoA) improved to 1.17% from 1.08% YoY
• Cost to income ratio decreased to 60.78% from 61.96%

Business Growth

The bank's business volumes showed positive trends:

Asset Quality Improvement

J&K Bank made significant strides in improving its asset quality:

• Gross Non-Performing Assets (GNPA) reduced to 3.50% from 3.91% YoY
• Net NPA increased slightly to 0.82% from 0.76%

Capital Adequacy

The bank's Capital Adequacy Ratio (CAR) strengthened to 15.98% from 15.07% previously, providing a buffer for future growth.

Branch Network and Digital Transactions

• The bank operates 1,019 branches with 841 in J&K, 37 in Ladakh, and 141 across 20 other states
• Digital transactions reached 94.02% of total transactions

Conclusion

With a strong capital position and improving asset quality, J&K Bank has demonstrated a solid performance in the first quarter. The bank's focus on digital capabilities and operational efficiency continues to drive improvements in its financial metrics.