Jammu and Kashmir Bank Limited

Key Financial Performance Metrics

Quarterly Performance (Q2 FY27):

  • Net Profit: ₹546 crores, representing 29% sequential growth and double-digit year-on-year growth
  • Operating Profit: ₹789 crores, registering 27% Y-o-Y growth and 12% Q-o-Q growth
  • Operating Income: Grew by over 6% sequentially and 14.5% Y-o-Y
  • Operating Expenditure: Increased by just 2% Q-o-Q and 6.5% Y-o-Y
  • Cost-to-Income Ratio: 56.57% for the quarter, moderating substantially on both sequential and Y-o-Y basis
  • Return on Assets (RoA): 1.07% for the quarter, jumping 20 bps Q-o-Q
  • Return on Equity (RoE): 13.68% for the quarter, jumping more than 250 bps Q-o-Q

Half-Yearly Performance (H1 FY27):

  • Operating Profit: ₹1,492 crores, recording Y-o-Y growth of over 15%
  • Net Interest Margin (NIM): 3.22% for the half year
  • Gross Slippages: ₹234 crores, halved compared to corresponding period last year (₹550 crores in H1 FY26)
  • Annualized Gross Slippage Ratio: 0.4% for the half year

Business Growth (as of September 30, 2026):

  • Total Business: ₹3.10 lakh crores, growing by 19.4% Y-o-Y
  • Advances Growth: 23.7% Y-o-Y
  • Deposits Growth: 16.3% Y-o-Y
  • YTD Deposit Growth: Approximately 7% against full-year guidance of 10%
  • CASA Ratio: 41.97% as on September 30, 2026

Asset Quality Metrics

  • Gross NPA (GNPA): 2.23% as on September 30, 2026 (decadal best)
  • Net NPA (NNPA): 0.51% as on September 30, 2026 (decadal best)
  • Provision Coverage Ratio (PCR): Improved from 90.53% (June 30, 2026) to 91.76% (September 30, 2026)

Portfolio Performance and Composition

RAM Portfolio (Retail, Agriculture, MSME):

  • Entire net incremental growth during Q2 contributed by RAM portfolio
  • Over 60% of net incremental credit YTD contributed by RAM portfolio
  • RAM growth contributed equally by Jammu, Kashmir, Ladakh and Rest of India regions

Segment-wise Growth:

  • Agricultural Advances: Sequential growth of 7.62%, Y-o-Y growth of around 17%
  • Retail Advances: Sequential growth of 3.90%
  • Auto Loans: Y-o-Y growth of over 25%, performing well in both JKL and Rest of India
  • Housing Loans: Double-digit Y-o-Y growth in Rest of India division

Yield Metrics:

  • Yield on Advances: 8.55% for the quarter, broadly flat sequentially
  • Retail Yield: Approximately 10%
  • Agriculture Yield: Approximately 9.5%
  • Corporate Yield (Rest of India): Approximately 7.2%
  • MSME Yield: Approximately 9%

Portfolio Linkage:

  • 65% of portfolio repo-linked
  • 31% of portfolio MCLR-linked

Deposit Profile

  • Term Deposit growth continues to outpace CASA growth in line with industry trend
  • Gap between Term Deposit and CASA growth narrowed in Q2 with positive CASA inflows
  • Cost of Deposits: Increased to 4.85% in Q2 due to Q1 CASA outflow
  • Bulk Deposits: Less than ₹3,000 crores of high-cost deposits outstanding

Capital Adequacy

  • Capital Adequacy Ratio: 16.57% as on September 30, 2026
  • CET 1: 13.88% as on September 30, 2026
  • Capital Raising Plans: ₹1,000 crores equity and ₹500 crores debt to be raised at opportune time

Other Income Components

  • Recovery from Written-Off Accounts: ₹25 crores in Q2
  • Treasury Income: ₹92 crores, including revaluation of unlisted stocks
  • Card Business: ₹41 crores
  • Loan Processing Charges: ₹18-19 crores
  • Penal Charges: ₹12.89 crores
  • Cheque Return Charges: ₹4.57 crores
  • SMS Charges: ₹6.42 crores
  • CGTMSE Fee: ₹4.79 crores

Forward-Looking Guidance (Revised)

  • Credit Growth: 14% plus (previously lower)
  • Deposit Growth: 12% plus
  • CASA Ratio: 42% plus
  • NIM: Considerable improvement expected
  • RoA: Around 1.20%
  • GNPA: Below 2%

Strategic Initiatives

  • Signed MOUs with multiple organizations for salary accounts (over 20 organizations in last quarter)
  • Strong monitoring of POS machines and QR codes for UPI payments in Jammu & Kashmir
  • Process of signing fresh 5-year MOU with Government of Jammu & Kashmir for salary accounts
  • Added SBI Life and HDFC Life as insurance partners to boost third-party product sales
  • Special OTS scheme approved for old NPAs and written-off accounts
  • Focus on non-fund-based business showing 30-40% improvement quarter-to-quarter

ECL Implementation Status

  • Model in final stages of development
  • Expected to be presented to Board by December 2026 meeting
  • Bank carrying approximately ₹300 crores buffer
  • Management expects ECL hit to be not more than average industry hit

Management Outlook

  • Expect NIM improvement due to repo rate hike transmission and reduced high-cost deposits
  • Expect yield improvement from Q3 onwards due to RAM portfolio contribution and repo rate hike
  • Expect moderation in Cost of Deposits due to reduced Term Deposit rates and positive CASA inflows
  • Employee costs expected to remain flat or slightly decrease in next two quarters due to retirements
  • Substantial pipeline of written-off account recoveries expected to support profitability
  • Treasury expected to support forex income growth