Jammu and Kashmir Bank (J&KBANK) Q1 25/26 earnings summary

Executive summary

• Net profit for Q1 FY26 rose 16.7% year-over-year to INR 485 crores (₹484.84 crore), marking the highest-ever Q1 profit despite regional disruptions and a one-time impairment provision of INR 87 crores related to RRB amalgamation.

• Excluding the one-time provision, net profit growth would have exceeded 30% year-over-year.

• Deposits grew 12.1% year-over-year to ₹1,48,542 crore; net advances rose 6.1% to ₹1,01,230 crore.

• Over 94% of transactions are now digital, reflecting rapid digital adoption.

• Maintained strong operational autonomy with a majority government shareholding and a robust branch network, especially in J&K and Ladakh.

Financial highlights

• Operating income increased 9.7% year-over-year; interest earned grew 9.1% and other income rose 29% year-over-year.

• Net Interest Margin (NIM) for the quarter was 3.72%, with yield on advances at 9.35% and cost of deposits at 4.83%.

• Cost-to-Income Ratio improved to 60.78% from 61.96% year-over-year.

• Gross NPA at 3.50% (down from 3.91%); Net NPA at 0.82% (up from 0.76%); Provision Coverage Ratio above 90%.

• Annualized ROA and ROE for the quarter were 1.17% and 14.60%, respectively.

Outlook and guidance

• FY26 guidance: credit growth 12%, deposit growth 10%, CASA 48%, NIM 3.65%-3.70%, ROA around FY25 levels, ROE 16%-17%, GNPA below 3%.

• NIM guidance revised downward due to RBI's 50 bps repo rate cut in June 2025.

• Focus on improving asset quality, expanding outside J&K, and investing in technology and digital banking.

• Emphasis on retail, agriculture, and MSME segments for growth.

• Credit cost expected to remain below 1%, possibly around 15-20 basis points for the year.