Jammu and Kashmir Bank (J&KBANK) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 net profit reached INR 551 crore, up 44.6% YoY, with operating profit over INR 750 crore and strong asset quality (GNPA 3.95%, NNPA 0.85%).

• Deposit growth rebounded to 9% YoY, advances grew 9.5% YoY, with higher growth in Rest of India (10.8%) versus J&K (7.2%).

• Retail loans dominate the portfolio, especially in J&K, while corporate and MSME loans lead in Rest of India.

• Enhanced digital presence and branch network, especially in J&K and Ladakh, with 871 branches in the region.

• Financials prepared in compliance with SEBI and RBI guidelines, reviewed by statutory auditors.

Financial highlights

• Net profit for H1 FY25 at INR 966.41 crore, up 36.6% YoY; standalone total income for Q2 FY25 was INR 3,419.63 crore.

• Net interest income rose 7.7% YoY to INR 1,435.93 crore in Q2 FY25; other income surged 55.6% YoY to INR 296.08 crore.

• NIM at 3.90% for Q2 and 3.88% for H1; cost of deposits at 4.8%; yield on advances at 9.57%.

• Cost-to-income ratio reduced to 54.56% for Q2; provision coverage ratio at 90.54%.

• Capital Adequacy Ratio (Basel III) at 14.99% (standalone), CET1 at 11.66% as of September 2024.

Outlook and guidance

• FY25 guidance: credit growth ~15%, deposit growth ~12%, CASA ~50%, NIM 3.75%-3.85%, ROA 1.25%-1.3%, ROE 17%-18%, gross NPA 3.5%.

• Strategic focus on expanding beyond J&K, digital banking, and growing CASA deposits.

• No immediate plans for equity raise; may consider in H2 FY25 if required.

• New RBI investment classification guidelines adopted from April 2024, impacting investment income comparability.

• Prudent provisions made, including above RBI norms for certain asset categories.