SRINAGAR: JK Bank reported a 12.6 per cent decline in its net profit for the first quarter of the current financial year, even as it achieved a historic milestone by crossing Rs 3 lakh crore in total business for the first time, underscoring robust business growth despite pressure on profitability.
The bank posted a net profit of Rs 424.18 crore for the quarter ended June 30, 2026, compared to Rs 485 crore in the corresponding period last year. Following the announcement of its financial results, the bank’s shares fell more than 13 per cent during Tuesday’s trading, touching an intraday low of Rs 153.20 on the NSE, as investors reacted to the earnings decline.
The financial results were approved by the bank’s Board of Directors at a meeting held at its corporate headquarters.
Despite the lower profit, the bank reported strong growth across its core business. Advances rose 25 per cent year-on-year to Rs 1,30,503 crore, while deposits increased 17 per cent to Rs 1,73,420 crore. Total business expanded by more than 20 per cent to Rs 3,03,923 crore, making J&K Bank the first time to cross the Rs 3 lakh crore mark.
Managing Director and Chief Executive Officer Amitava Chatterjee described the achievement as a defining moment in the bank’s transformation journey.
“Crossing the landmark milestone of Rs 3 trillion in total business reflects not merely scale but the deep trust of our customers and the consistent execution of our growth strategy,” he said, according to a press note issued by the bank, adding that the bank would continue pursuing balanced, customer-centric and technology-led expansion while strengthening its presence across the country.
The June quarter also reflected resilience in the bank’s lending operations. Net Interest Income (NII) increased by 2.2 per cent to Rs 1,497 crore from Rs 1,465 crore a year earlier, although higher funding costs and slower mobilisation of low-cost deposits continued to compress margins. Net Interest Margin (NIM) stood at 3.28 per cent.
Operating profit rose 4.5 per cent year-on-year to Rs 703 crore, while the cost-to-income ratio improved to 58.90 per cent from 60.75 per cent, indicating better operational efficiency. The yield on advances also improved sequentially to 8.56 per cent.
Chatterjee attributed the decline in quarterly profit to an industry-wide increase in funding costs and sluggish growth in low-cost deposits, which affected margins across the banking sector.
However, he said the bank’s recent investments in strengthening its liability franchise, expanding business and reinforcing the balance sheet were deliberate long-term decisions rather than measures aimed at boosting short-term profitability.
“Our core business fundamentals remain strong, and we witnessed sequential growth in deposits in the first quarter for the first time in the last six years,” he was quoted as saying.
The bank also continued to improve its asset quality. Gross Non-Performing Assets (GNPA) declined to 2.37 per cent at the end of June from 2.50 per cent in March and 3.50 per cent a year earlier. Net NPA improved sequentially to 0.60 per cent from 0.64 per cent, while the Provision Coverage Ratio strengthened to 90.53 per cent from 90.09 per cent a year ago.
According to Chatterjee, the sustained improvement in asset quality reflects disciplined underwriting, robust credit monitoring and focused recovery efforts. He noted that the annualised gross slippage ratio for the June quarter remained below 0.5 per cent, highlighting the quality of the bank’s loan portfolio.
The lender also reported a stronger capital position, with its Capital Adequacy Ratio rising to 16.67 per cent from 15.98 per cent a year earlier, comfortably above regulatory requirements. The management said the strong capital base, coupled with approvals for additional capital raising, provides adequate headroom to support future growth while maintaining financial resilience.
While the sharp fall in the bank’s share price reflected investor concerns over margin pressure and lower profitability, the June-quarter results indicate that J&K Bank continues to prioritise sustained business expansion, improving asset quality and a stronger balance sheet, even as elevated funding costs remain a near-term challenge.
