J&K Bank Net Profit Falls 11% to ₹494.11 Cr in July-September

Jammu and Kashmir Bank on Saturday said its net profit fell 11 per cent to Rs 494.11 crore in July-September quarter of the current financial year, while earnings for the first half increased slightly to Rs 978.95 crore.

While maintaining higher provisioning requirements owing to regulatory compliance, J&K Bank logged a net profit of Rs 494.11 crore in the second quarter of current financial year, remaining well on course to meet its annual market guidance, the bank said in a statement here.

Its net profit for the first half increased to Rs 978.95 crore compared to Rs 966.41 crore recorded in the same period of last financial year.

The bank had earned a net profit of Rs 551 crore in the July-September period of the preceding fiscal.

Total income rose to Rs 3,447 crore in the quarter under review from Rs 3,420 crore in the same period a year ago, J&K Bank said in a regulatory filing.

Reflecting steady core operations, the bank's net interest income (NII) for H1 was marginally up by 3.4 per cent year-on-year at Rs 2,899.43 crore, while for Q2 NII stood at Rs 1,433.99 crore.

In line with its market guidance, the bank maintained its NIM at 3.64 per cent during H1. The bank's other income for H1 was at Rs 405.19 crore, while the cost-to-income ratio for the half year stood at 60.80 per cent, the statement said.

The bank's MD and CEO Amitava Chatterjee said in spite of widespread disruptions during the first quarter following the Pahalgam incident and the extensive damage caused by floods in the second quarter, "the overall growth we have recorded is both encouraging and reassuring".

"Even though profitability for Q2 was moderated due to an additional impairment provision of Rs 92 crore made during the quarter in compliance with regulatory requirements, the performance is better than what was anticipated under the challenging circumstances," he said.

The bank has made a total provisioning of Rs 180 crore towards Jammu and Kashmir Grameen Bank during the first two quarters of the current financial year. Excluding the impact, the bank's H1 profitability would be upwards of 15 per cent YoY.

The statement said that despite a difficult situation arising out of Pahalgam attack in Q1 and floods, landslides thereafter in Q2, the bank has gained further stability in asset quality.

During the reporting quarter, the bank's gross NPA ratio declined 18 basis-points Q-o-Q to 3.32 per cent and decreased by 63 bps Y-o-Y from 3.95 per cent recorded in September 2024, it said.

Net NPA ratio also moderated by 9 bps YoY to 0.76 per cent from 0.85 per cent, while declining 6 bps from 0.82 per cent recorded for the June quarter of the current financial year, the statement added.

The Provision Coverage Ratio (PCR) of the bank stayed above 90 per cent level, while return on assets (RoA) stood at 1.17 per cent for the half year.

On the bank's asset quality, the MD & CEO expressed optimism, saying, "with GNPA around 3.30 per cent half-way through the year, I think on the asset quality front, our progress is steady".

"And with our robust and focused risk-management practices in place, I remain optimistic about meeting our annual guidance of below 3 per cent GNPA by the financial year-end. Besides, our PCR is also healthy at 90.39 per cent," Chatterjee said.

About the business growth, the bank said during the quarter under review, its deposits witnessed a growth of 10.23 per cent year-on-year and reached Rs 15,2,030 crore, while net advances increased by 9.38 per cent to Rs 10,5,153 crore from Rs 96,139 crore recorded last year.

Up by 18 bps in sequential terms from 45.71 per cent recorded in Q1, the bank's CASA (current account savings account) ratio stood at 45.89 per cent in Q2 and remained one of the highest in the industry, the statement said.

"Marking a nearly 10 per cent year-on-year growth in business numbers reaching Rs 2.57 lakh crore, our Q2 performance demonstrates the bank's operational discipline," the MD & CEO said.

He said the deposit growth is at par with the industry average, while advances primarily driven by agri/corporate segments have shown good credit growth both in sequential and YoY terms.

Our CASA ratio also exhibited a slight uptick to 45.89 per cent on sequential basis, underscoring our commitment to sustained, quality growth, he added.

Chatterjee said despite tough challenges, this steady performance in the first half of the financial year affirms my confidence that we are very much on track to achieve our annual guidance growth numbers.

The bank's Capital Adequacy Ratio (CAR) for July-September quarter stood at 15.27 per cent as against 14.99 per cent recorded a year ago.

The MD & CEO said that with a CRAR of over 15 per cent, we remain well-capitalized and positioned to support future growth opportunities while maintaining financial discipline.

On the bank's growing operational focus in rest of the country, the MD & CEO said the bank continues to execute the policy of expanding operations beyond J&K, strategically partnering with top-tier corporates across India.

Simultaneously, through increased engagement of the bank's leadership with the clientele across these geographies, we are in the process of sharpening our focus on building a gainful niche in the retail landscape outside J&K, particularly in the personal banking/finance segment, he said.

Chatterjee said all these initiatives are tangible markers of the transformation currently underway at the bank.

However, the foundation of our progress rests on a firm triad: our people, our processes and our technology. And we are steadily strengthening all these pillars, ensuring that efficiency, resilience and excellence remain at the core of every facet of our operations, he added.