J&K Bank posts Q2 net profit of INR494 crores, asset quality improves

Jammu & Kashmir Bank reported a net profit of INR494 crores for Q2 FY2026, a 1.9% quarter-on-quarter growth. Deposits grew 2.4% sequentially and 10.2% year-on-year, while advances saw a 3.9% sequential and 9.4% year-on-year increase. A notable highlight was the 2.8% growth in CASA deposits, improving the CASA ratio to 45.89% and reversing a nine-quarter declining trend. The bank recorded a net interest margin of 3.56% for the quarter.

Profitability was impacted by an INR180 crores impairment provision related to the amalgamation of Ellaquai Dehati Bank with J&K Grameen Bank, with INR92 crores in the current quarter and INR87 crores in the previous quarter. Excluding this one-off item, half-yearly net profit growth would have been around 20% year-on-year. Operating costs remained controlled with a marginal 2.2% year-on-year growth.

Asset quality improved, with gross non-performing assets reducing to 3.32% and net non-performing assets to 0.76%, while the provision coverage ratio remained above 90%. Jammu & Kashmir Bank reaffirmed its guidance for FY2026, targeting credit growth of 12%, deposit growth of 10%, CASA ratio of 48%, return on assets between 1.20% and 1.25%, return on equity between 15% and 16%, and gross non-performing assets below 3%. The bank also noted that a GST notice of INR16,000 crores had not been pursued by the GST Council.