J&K Bank’s Resilient Banking Performance

The third quarter performance of Jammu and Kashmir Bank offers a reassuring picture of how a regional bank can demonstrate financial resilience and sustained profitability even while operating in a challenging economic and geographic environment. The numbers approved for the October to December quarter of FY 2025–26 reflect not just a recovery from past disruptions but a steady transition toward expansion, supported by disciplined execution, improving asset quality, and balanced growth.

For the third quarter, the bank reported a net profit of Rs 586.73 crore, registering an increase of 18.7 per cent on a quarter-on-quarter basis and 10.4 per cent year on year compared to Rs 531.51 crore in the corresponding quarter of the previous financial year. This improvement gains added significance when viewed alongside the nine-month performance, where cumulative net profit rose to Rs 1,565.68 crore, up 4.5 per cent from Rs 1,497.92 crore recorded during the same period last year. Together, these numbers point to a consistent earnings trajectory rather than a one-time upswing. Operational indicators during the quarter showed further signs of stability. Net Interest Margin improved to 3.62 per cent, rising by six basis points quarter on quarter, supported by better yield management and moderation in funding costs. The Cost to Income Ratio declined to 55.88 per cent from 57.28 per cent in the year ago period, reflecting ongoing efforts to enhance efficiency. Return on Assets for the nine-month period stood at 1.23 per cent, underlining a healthier profitability profile. Income growth remained balanced across key streams. Net Interest Income increased by 3.8 per cent quarter on quarter to Rs 1,488.88 crore, while Other Income recorded a year on year growth of 15.3 per cent to Rs 279.46 crore from Rs 242.32 crore. The cost of deposits declined to 4.69 per cent from 4.86 per cent in the previous quarter, offering additional support to margins at a time when interest rate movements remain closely watched. Asset quality trends continued to move in a positive direction. Gross Non Performing Assets declined to 3.00 per cent, improving by 108 basis points from 4.08 per cent a year earlier. Net NPAs also reduced to 0.68 per cent from 0.94 per cent on a year on year basis and from 0.76 per cent in the preceding quarter. The Provision Coverage Ratio stood at 90.46 per cent, providing a strong buffer against potential stress. These improvements are particularly noteworthy given the broader challenges faced by the regional economy, including the impact of floods and other disruptions. Business growth during the quarter remained robust yet measured. Gross advances grew by 17.3 per cent year on year to reach Rs 1,16,248 crore as of December 31, 2025, while deposits increased by 10.6 per cent to Rs 1,55,861 crore. Credit expansion was driven largely by retail, MSME, agriculture, and select corporate segments, supported by improved credit appetite and deeper customer engagement. The double-digit growth in deposits, achieved in a competitive environment, reflects sustained customer confidence in the institution. The bank’s capital position also remained comfortable. The Capital Adequacy Ratio under Basel III norms stood at 15 per cent, placing the bank in a position to support future lending requirements. This capital base is expected to be further strengthened through internal accruals from current-year profits and a board-approved capital raise of Rs 1,250 crore, offering additional flexibility for calibrated expansion. Beyond financial metrics, the bank continued to emphasise its developmental role in the region. Initiatives such as the 2025 Rehabilitation Package for disturbance-affected borrowers, which provided extended repayment timelines and additional credit support, highlighted its commitment to supporting livelihoods and economic activity during periods of stress. At the same time, continued investment in digital initiatives aimed at improving customer experience, security, and operational efficiency signals a forward-looking approach.

Overall, the quarter reflects a phase of consolidation marked by improving asset quality, steady profitability, and disciplined growth. Rather than rapid expansion, the focus appears to be on strengthening the balance sheet and building resilience. As the financial year progresses, maintaining this balance between caution and growth will remain important, but the current performance suggests the bank is moving ahead with quiet confidence and measured stability. Above all, these results underline the decisive yet disciplined leadership of J&K Bank’s management, whose strategic clarity and operational resolve continue to drive resilience, credibility, and sustained financial strength.