Jana Small Finance Bank has reported its financial results for the second quarter of fiscal year 2026, showing signs of stabilization in its unsecured assets portfolio and strong growth in secured lending segments.

Key Highlights

• Total deposits crossed ₹30,000 crore milestone, reaching ₹32,532.00 crore
• CASA grew 14% year-to-date, term deposits up 11% year-to-date
• Cost of deposits decreased to 7.88% in Q2 FY26
• Unsecured assets portfolio showed 0.3% growth after previous declines
• Secured assets demonstrated strong growth across various segments
• ₹250.00 crore Tier 2 capital raised, improving Capital Adequacy Ratio by 1.25%

Financial Performance

The bank reported a Profit After Tax (PAT) of ₹75.00 crore for Q2 FY26 and ₹177.00 crore for the first half of the fiscal year. The Net Interest Margin (NIM) stood at 6.6% for Q2, slightly down from 6.7% in Q1.

Asset Quality and Portfolio Mix

As of September 30, 2025, Jana Small Finance Bank's gross loan portfolio reached ₹31,655.00 crore. The portfolio composition is as follows:

The bank has expanded its coverage under guarantee programs, with 49% of the total unsecured book now under such schemes.

Segment-wise Performance

Strong growth was observed across various secured lending segments:

• Affordable Housing: 34.4% year-on-year growth
• MSME: 27% year-on-year growth
• Gold Loans: 17.5% quarter-on-quarter growth
• Two-Wheelers: 12.8% quarter-on-quarter growth

Strategic Initiatives

Jana Small Finance Bank has implemented several strategic initiatives to strengthen its position:

1. Increased Focus on Secured Lending: The bank aims to maintain 80% of its portfolio in secured assets.
2. Expansion of Guarantee Programs: Plans to have 96% of the unsecured portfolio under guarantee programs by March 2027.
3. Capital Strengthening: Raised ₹250.00 crore in Tier 2 capital, improving the Capital Adequacy Ratio.
4. Cost Management: Efforts to optimize costs, particularly in the microfinance (MFI) business.

Management Commentary

Ajay Kanwal, Managing Director and CEO of Jana Small Finance Bank, commented on the results: "We are pleased to see the stabilization of our unsecured assets portfolio and the strong growth in our secured lending segments. Our strategic focus on increasing the share of secured assets and expanding coverage under guarantee programs for unsecured lending is yielding positive results."

Future Outlook

The bank has revised its PAT growth guidance to 0-2% for the current fiscal year, while maintaining 20% growth targets for loans and deposits. Management expects the Net Interest Margin to improve in the coming quarters, potentially reaching closer to 7% by the end of the fiscal year.

Jana Small Finance Bank continues to work towards its goal of becoming a universal bank, with the application process ongoing and regulatory audits completed.

As the bank navigates the evolving financial landscape, it remains committed to its strategy of creating a balanced portfolio with a strong emphasis on secured lending and risk mitigation through guarantee programs for its unsecured book.

Jana Small Finance Bank , a key player in India's small finance banking sector, has announced ambitious growth plans for the fiscal year 2026 (FY26), targeting a 35-40% increase in asset growth. The bank's strategy focuses on expanding its secured lending portfolio, particularly in affordable housing, MSME, and gold loan segments.

Growth Strategy and Asset Mix

The bank is strategically shifting its focus towards secured lending, aiming to have 95% of its portfolio either secured or covered under guarantee programs by March 2027. As of September 30, 2025, the bank's secured book stood at 72.5% of its total assets, showing significant progress towards this goal.

Jana SFB's Managing Director and CEO, Ajay Kanwal, stated, "Our focus on building a granular and diversified balance sheet continues to yield results, supported by the trust of our customers and disciplined execution by our teams."

Financial Performance Highlights

For the half-year ended September 30, 2025, Jana SFB reported:

• Net Profit: ₹177.00 crores
• Gross Loan Portfolio: ₹31,655.00 crores (20% year-on-year growth)
• Total Deposits: ₹32,532.00 crores (31% year-on-year growth)
• CASA (Current Account Savings Account) Ratio: 18.3%
• Gross Non-Performing Assets (GNPA): 2.8%
• Net Non-Performing Assets (NNPA): 0.9%
• Capital Adequacy Ratio: 20.7%

Segment-wise Performance

Future Outlook

Jana SFB expects to see improvements in several areas:

1. Credit Costs: The bank anticipates a reduction in credit costs over the coming financial years, particularly as it increases its focus on secured lending.

2. Net Interest Margins (NIMs): With the cost of funds expected to decline in the coming quarters, the bank foresees an improvement in NIMs.

3. Earnings Momentum: The calibrated resumption of unsecured lending, along with continued moderation in Gross and Net NPAs, is expected to support earnings growth.

Kanwal added, "Backed by favourable macroeconomic conditions, prudent risk management, and operational strength, Jana Small Finance Bank is well-positioned for sustained and profitable growth in the periods ahead."

Challenges and Mitigations

While the bank faces challenges in the MFI sector, its strategy to move towards a predominantly secured book or loans covered under guarantee programs is expected to mitigate risks. The bank has also made accelerated provisions of ₹222.00 crores in H1 FY26 to strengthen its balance sheet.

Conclusion

Jana Small Finance Bank's focus on secured lending, coupled with its strong deposit growth and improving asset quality, positions it well for the targeted 35-40% asset growth in FY26. The bank's strategic shift towards a more secure loan portfolio is expected to enhance its resilience and profitability in the coming years.