Jammu Kashmir Bank Posts Rs 494 Cr Profit in Q2 Despite Flood Impact

SRINAGAR: Maintaining its growth trajectory amid challenging circumstances, Jammu and Kashmir Bank has reported a net profit of Rs 494.11 crore for the July–September quarter (Q2) of the current financial year, keeping well on course to meet its annual market guidance. For the first half (H1) of the financial year, the Bank’s net profit rose to Rs 978.95 crore compared to Rs 966.41 crore in the same period last year.

The Bank’s Board of Directors reviewed and approved the quarterly and half-yearly financial results at a meeting held at the Corporate Headquarters, with Managing Director and CEO Amitava Chatterjee describing the performance as “encouraging and reassuring” given the operational disruptions faced earlier this year.

Despite a higher provisioning requirement, including Rs 92 crore towards its investment in Jammu and Kashmir Grameen Bank after its merger with Ellaquai Dehati Bank under the Centre’s “One State, One RRB” policy, the Bank’s profitability remained resilient. The total provisioning towards the Regional Rural Bank stood at Rs 180 crore during the first two quarters. Excluding this impact, the Bank said its H1 profitability would have grown upwards of 15 per cent year-on-year.

The Bank’s Net Interest Income (NII) for the half-year rose by 3.4 per cent year-on-year to Rs 2,899.43 crore, while NII for Q2 stood at Rs 1,433.99 crore. The Net Interest Margin (NIM) was maintained at 3.64 per cent, and other income for the half-year stood at Rs 405.19 crore. The Cost-to-Income Ratio was reported at 60.80 per cent.

“Despite 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,” said Chatterjee, according to a bank statement. “Even though profitability for Q2 was moderated due to additional provisioning, the performance is better than what was anticipated under the challenging circumstances.”

The Bank’s asset quality showed further improvement, with the Gross Non-Performing Asset (GNPA) ratio declining to 3.32 per cent from 3.95 per cent a year ago and the Net NPA ratio moderating to 0.76 per cent from 0.85 per cent. The Provision Coverage Ratio remained strong at above 90 per cent, while Return on Assets (RoA) stood at 1.17 per cent for the half-year.

“With GNPA around 3.30 per cent halfway through the year, our progress is steady. With robust risk-management practices, I am confident of achieving the annual guidance of below 3 per cent GNPA by year-end,” said Chatterjee.

The Bank’s Capital Adequacy Ratio (CAR) improved to 15.27 per cent from 14.99 per cent last year. Chatterjee said the Bank remains well-capitalised to support future growth, adding that including the half-yearly profit would raise the ratio to above 16 per cent.

JK Bank’s total business grew by nearly 10 per cent year-on-year to Rs 2.57 lakh crore. Deposits increased by 10.23 per cent to Rs 1,52,030 crore, while advances grew 9.38 per cent to Rs 1,05,153 crore. The CASA ratio improved to 45.89 per cent, one of the highest in the industry.

“Our deposit growth is at par with the industry average, while advances—driven by agricultural and corporate segments—have shown good credit growth both sequentially and year-on-year. Despite tough challenges, our performance in the first half reaffirms that we are well on track to achieve our annual growth targets,” said Chatterjee.

Highlighting the Bank’s strategic expansion beyond Jammu and Kashmir, the MD said, “We continue to execute our policy of expanding operations across India by partnering with top-tier corporates and focusing on building a niche in the retail banking and personal finance segments.”

Concluding his remarks, Chatterjee said the Bank’s ongoing transformation is anchored in its people, processes, and technology. “We are steadily strengthening these pillars to ensure efficiency, resilience, and excellence remain at the heart of our operations,” he added.