SRINAGAR: Despite a dip in quarterly earnings due to higher provisioning, Jammu and Kashmir Bank has posted its highest-ever annual net profit of Rs 2083 crore for the financial year 2024–25, up nearly 18 per cent from Rs 1767 crore in the previous fiscal, buoyed by strong other income growth and improved asset quality.
The Srinagar-headquartered private sector lender reported an eight per cent year-on-year decline in net profit for the January–March 2025 quarter, which stood at Rs 585 crore compared to Rs 640 crore in the same period last year. The fall in quarterly earnings was attributed to provisions of Rs 58 crore towards bad and doubtful debts, a reversal from a provision write-back of Rs 47.4 crore during the corresponding quarter a year earlier.
However, the bank’s operational performance remained robust, with pre-provision operating profit rising 20.5 per cent to Rs 800 crore during the quarter, up from Rs 664 crore in Q4FY24. Net interest income (NII) stood at Rs 1,479 crore for the quarter, while the net interest margin (NIM) came in at 3.88 per cent.
For the full year, the bank’s NII grew 11 per cent to Rs 5,794 crore, and other income surged by nearly 38 per cent to Rs 1,137 crore. This performance enabled the bank to offset pressure on margins and provisions, ultimately delivering a record annual profit. The bank’s NIM for the year stood at 3.92 per cent, although MD and CEO Amitava Chatterjee indicated a cautious outlook going forward.
“With repo rates expected to move downward, NIMs will be under a little bit of pressure. I would be happy with anything around 3.7 per cent,” Chatterjee was quoted as having said, adding that the bank remains confident in its lending momentum, particularly in agriculture and corporate segments.
JK Bank’s gross non-performing assets (GNPAs) improved significantly, falling to 3.37 per cent from 4.08 per cent a year ago, while net NPAs declined to 0.79 per cent. The bank also maintained a strong provision coverage ratio above 90 per cent. The asset quality gains came alongside a 10.24 per cent year-on-year rise in total deposits to Rs 1.49 lakh crore and an 11.13 per cent increase in net advances to Rs 1.04 lakh crore. The current and savings account (CASA) ratio stood healthy at 47 per cent.
The bank’s board has recommended a dividend of Rs 2.15 per equity share of Re 1 face value, representing a 215 per cent dividend for FY25, the highest declared in recent years.
Chatterjee said the bank expects to maintain growth momentum in 2025–26 (FY26), targeting a 12 per cent expansion in assets under management (AUM), with agriculture and corporate lending as key drivers.
“The normal growth that happens in this geography will continue because there is significant dependence on agriculture,” he said. “We’ve seen substantial credit take-off post-March in the agriculture sector within our bank, and I don’t see any reason why that won’t grow.”
Currently, 67 per cent of the bank’s business comes from Jammu and Kashmir, while 33 per cent is from the rest of India, a distribution that the bank is gradually reshaping through geographical diversification.
Asked about the potential fallout of the recent Pahalgam attack, Chatterjee dismissed any long-term operational impact. While acknowledging that tourism might see a short-term dent, he clarified that the sector comprises only about 1 per cent of the bank’s total loan book.
“Tourism has never been the core of our lending. The larger part of the region’s economy, and our business, is tied to agriculture, which remains stable,” he told reporters, adding that customer repayment behaviour in Jammu and Kashmir continues to be strong, and the likelihood of defaults remains low.
Chatterjee also underscored the importance of corporate lending from outside the Union Territory, which significantly supported the bank’s performance in the final quarter of FY25. This segment, he noted, provides a vital buffer to sustain momentum when regional uncertainties emerge.
JK Bank’s market capitalisation currently stands at Rs 10,616 crore. Its stock, trading at Rs 96 on the National Stock Exchange as of 9:17 am on Monday, has shed 28 per cent over the past year.
The bank is also continuing its digital and structural transformation, with a focus on backend automation, environmental sustainability, and workforce development, including initiatives like its in-house digital learning platform ‘e-Pathshala.’
Chatterjee concluded by reiterating the bank’s long-standing commitment to inclusive financial growth, particularly in its home territory. “We are proud to be an institution of systemic importance for economic transformation in our core geographies.”
