Jammu and Kashmir Bank (J&KBANK) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw strong financial performance, with net profit up 27% year-over-year to ₹415.49 crore, robust growth in deposits and advances, and improved asset quality and capital adequacy.

• The bank maintained its strategic focus on expanding outside Jammu & Kashmir, with plans to open 15-20 new branches and continued digital and branch expansion across India.

• Retail, MSME, and agriculture lending remained a focus, with a healthy mix in advances and deposits.

• Standalone and consolidated financial results for the quarter ended June 30, 2024, were reviewed and approved by the Board, reflecting compliance with SEBI and RBI regulations.

Financial highlights

• Net interest income rose 7% year-over-year to ₹1,369.23 crore; operating profit up 13% to ₹594.68 crore; profit after tax up 27%.

• Deposits grew just under 10% year-over-year to ₹1,32,573 crore; gross advances up 13% to ₹98,580 crore; CD ratio at 72%.

• Gross NPA reduced to 3.91% (from 5.77% last year), net NPA at 0.76%-0.77%, and provision coverage at 91.57%.

• NIM strong at 3.86%, cost of deposits at 4.66%, yield on advances at 9.5%.

• Annualized ROA at 1.08% and ROE at 14.82%; EPS for Q1 FY25 at ₹4.01; book value per share at ₹80.70.

Outlook and guidance

• FY25 guidance maintained: credit growth 15%, volume growth 12%, CASA 50%, NIM 3.75%-3.85%, ROA 1.25%-1.3%, ROE 17%-18%, gross NPA 3.5%.

• Emphasis on expanding beyond J&K, increasing digital adoption, and growing non-interest income.

• Employee cost and OpEx expected to increase in single digits; targeting bottom line of INR 4,000 crore by FY28.

• Bank adopted new RBI investment classification and valuation guidelines from April 1, 2024, resulting in a one-time net gain of ₹26.31 crore credited to General Reserve.

• Additional prudent provisioning made for sub-standard and doubtful accounts, and wage revision.