Jammu and Kashmir Bank

Loan growth improves, one-off provisions hit bottomline

J&K Bank has reported 10% decline in net profit at Rs 494.11 crore for the quarter ended September 2025 (Q2FY2026). The bank has posted flat net interest income (NII), while the core fee income of the bank declined 22% in Q2FY2026. The Net Interest Margin (NIM) of the bank moderated to 3.56% in Q2FY2026 compared to 3.90% in the corresponding quarter of previous year.

On business front, the bank as has posted 10% growth in business with 9% rise in loan book. The asset quality of the bank has improved Q2FY2026. Bank has reduced credit to deposit ratio to 71.0% at end September 2025 from 72.0% at end September 2024. CASA ratio of the bank has declined to 45.9% at end September 2025 from 48.6% at end September 2024.

Asset quality improves: The bank has exhibited an improvement in the asset quality in Q2FY2026.

The fresh slippages of loans declined to Rs 237 crore in Q2FY2026 compared with 274 crore in previous quarter and Rs 256 crore in the corresponding quarter last year.

The recoveries of NPAs stood at Rs 66.54 crore, upgradations at Rs 198.01 crore and the write-off of loans was at Rs 25.81 crore in Q2FY2026.

The standard restructured loan book of the bank declined to Rs 405 crore end September 2025 compared to Rs 410 crore a quarter ago.

Provision coverage ratio was steady at 90.39% at end September 2025 compared to 90.09% a quarter ago and 90.54% a year ago.

The capital adequacy ratio of the bank stood at 15.3% with Tier I ratio at 13.1% at end September 2025.

The risk weighted assets of the bank has increased 9% YoY to Rs 105187 crore end September 2025,

Asset Quality Indicators: J & K Bank
?	Sep-25	Jun-25	Mar-25	Dec-24	Sep-24	Variation
						QoQ	YTD	YoY
Gross NPA (Rs Crore)	3585.26	3638.19	3604.84	4041.04	3916.26	-1	-1	-8
Net NPA (Rs Crore)	795.94	829.02	818.07	898.08	813.39	-4	-3	-2
% Gross NPA	3.32	3.50	3.37	4.08	3.95	-18	-5	-63
% Net NPA	0.76	0.82	0.79	0.94	0.85	-6	-3	-9
% PCR	90.39	90.09	90.28	89.67	90.54	30	11	-15
% CRAR - Basel III	15.27	15.98	16.29	15.09	14.99	-71	-102	28
% CRAR - Tier I - Basel III	13.06	13.68	13.96	12.71	12.70	-62	-90	36
Variation in basis points for figures given in percentages and in % for figures in Rs crore

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Business Highlights:

Business growth improves: The business of the bank has increased 10% YoY to Rs 259973 crore end September 2025, driven by 9% rise in advances to Rs 107943 crore. Deposits increased 10% to Rs 152030 crore at end September 2025.

CASA deposits ratio declines yoy, improves on sequential basis: The CASA deposits of the bank increased 4% YoY to Rs 69774 crore at end September 2025. The current account deposits increased 7% to Rs 14648 crore, while saving account deposits rose 3% to Rs 55126 crore end September 2025. The CASA ratio declined to 45.9% at end September 2025 compared to 48.6% at end September 2024, while improved from 45.7% a quarter ago. The term deposits have increased 16% to Rs 82256 crore end September 2025.

Loan growth improves: Advances growth was driven by retail loans rising 7% YoY to Rs 41372 crore at end September 2025, while credit to agriculture surged 27% to Rs 12334 crore and MSME rose 3% to Rs 21778 crore at end September 2025. The corporate credit has moved up 9% to Rs 32459 crore end September 2025.

Investment book of the bank increased 15% YoY to Rs 44502 crore at end September 2025. The SLR book moved up 11% to Rs 34931 crore, while non SLR book surged 31% to Rs 9571 crore at end September 2025. The AFS book rose 5% to Rs 13990 crore, while HTM book increased 11% to Rs 27410 crore at end September 2025. The duration of the overall investment portfolio stood at 3.3 years and AFS portfolio at 2.96 years at end September 2025.

Margins eases: The bank has shown 6 bps YoY rise in cost of deposits to 4.86%, while yield on advances dipped 37 bps YoY to 9.20% in Q2FY2026. Thus, the NIM has declined 34 bps YoY, while dipped 16 bps qoq to 3.56% in Q2FY2026.

Branch expansion: The bank has reduced 4 branches in Q2FY26, taking overall tally to 1015 branches and 1428 ATM`s end September 2025.

Book value of the bank stood at Rs 126.6 per share at end September 2025, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 119.0 per share at end September 2025.

Quarterly Performance

NII flat as NIM declines: Bank has recorded 5% increase in the interest earned at Rs 3291.82 crore, while interest expenses increased 10% to Rs 1857.83 crore in Q2FY2026. NII was flat at Rs 1433.99 crore in the quarter ended September 2025.

Fee income and treasury declines: Bank has posted 22% decline in core fee income to Rs 60 crore, while the recoveries and other income declined 17% to Rs 157 crore in Q2FY26. However, the treasury segment witnessed losses of Rs 63 crore due to one-off impairment provisions of Rs 90.29 crore for J&K Grameen Bank (in addition to Rs 87.47 crore provided in Q1FY26). The overall non-interest income dipped 48% to Rs 154.89 crore in the quarter ended September 2025.

Expenses ratio rises: The operating expenses of the bank rose 2% to Rs 966.26 crore, as other expenses moved up 12% to Rs 320.37 crore, while employee expenses declined 2% to Rs 645.89 crore in Q2FY2026. Cost to income ratio deteriorated to 60.8% in Q2FY2026 compared with 54.6% in Q2FY2025 causing the Operating Profit to decline 21% to Rs 622.62 crore.

Provisions and contingencies reversed: The bank has reversed provisions amounting to Rs 10.93 crore. The loan loss provisions increased to Rs 3.95 crore, while the bank has written back investment provisions fell Rs 2.12 crore and standard asset provisions Rs 12.99 crore in Q2FY2026.

Effective tax rate declined to 22.0% in Q2FY2026 from 27.0% in Q2FY2025. Net Profit fell by 10% YoY to Rs 494.11 crore during quarter ended September 2025.

Financial Performance H1FY2026:

Bank has posted 1% increase in net profit to Rs 978.95 crore in the half year ended September 2025 (H1FY2026). The net interest income increased 3% to Rs 2899.42 crore, while non-interest income declined 17% to Rs 405.19 crore. Net total income was flat at Rs 3304.61 crore in H1FY2026. The operating expenses increased 5% to Rs 2009.15 crore, while provision and contingencies dipped 72% to Rs 4.16 crore. Profit before tax declined 6% to Rs 1291.30 crore in H1FY2026. The cost-to-income ratio rose to 60.8% in H1FY2026 compared to 58.1% in H1FY2025. An effective tax rate declined to 24.2% in H1FY2026 compared to 29.3% in H1FY2025. The net profit has increased 1% to Rs 978.95 crore in H1FY2026.

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J & K Bank: Results
Particulars	2509 (3)	2409 (3)	Var %	2509 (6)	2409 (6)	Var %	2503 (12)	2403 (12)	Var %
Interest Earned	3291.82	3123.55	5	6560.09	6117.93	7	12535.86	11212.37	12
Interest Expended	1857.83	1687.62	10	3660.67	3312.78	11	6742.04	6008.68	12
Net Interest Income	1433.99	1435.93	0	2899.42	2805.15	3	5793.82	5203.69	11
Other Income	154.89	296.08	-48	405.19	490.18	-17	1136.81	825.48	38
Net Total Income	1588.88	1732.01	-8	3304.61	3295.33	0	6930.63	6029.17	15
Operating Expenses	966.26	945.02	2	2009.15	1913.67	5	4000.84	3752.29	7
Operating Profits	622.62	786.99	-21	1295.46	1381.66	-6	2929.79	2276.88	29
Provisions & Contingencies	-10.93	32.53	LP	4.16	15.05	-72	-3.91	-107.69	-96
Profit Before Tax	633.55	754.46	-16	1291.30	1366.61	-6	2933.70	2384.57	23
Provision for tax	139.44	203.54	-31	312.35	400.20	-22	851.24	617.30	38
PAT	494.11	550.92	-10	978.95	966.41	1	2082.46	1767.27	18
EPS*(Rs)	17.9	20.0	?	17.8	17.6	?	18.9	16.0	?
Equity	110.1	110.1	?	110.1	110.1	?	110.1	110.1	?
Adj BV (Rs)	119.0	101.6	?	119.0	101.6	?	110.2	92.2	?
* EPS and Adj BV are calculated on diluted equity as given for each year. Face Value: Rs 1, Figures in Rs crore
Source: Capitaline Corporate Database

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