Srinagar, Sep 8: Jammu and Kashmir Bank has crossed the ₹3 lakh crore business mark, even as its latest quarterly results show pressure on profitability from declining lending yields, tighter interest margins and higher provisions.
The bank reported a net profit of ₹424.18 crore for the quarter ended June 30, 2026, down 12.6 per cent year-on-year. During the quarter, advances grew 25 per cent to ₹1,30,503 crore, while deposits increased 17 per cent to ₹1,73,420 crore.
The bank’s net interest margin declined to 3.28 per cent during the quarter. Its yield on advances fell to 8.56 per cent from 9.35 per cent a year earlier, while the cost of deposits declined only marginally from 4.83 per cent to 4.74 per cent, putting pressure on the spread between lending and deposit costs.
Bank officials have attributed the margin pressure to falling lending rates following RBI rate cuts, competition for deposits and relatively slower growth in low-cost deposits.
Provisioning also increased sharply during the quarter, rising to around ₹84 crore from about ₹15 crore in the corresponding period of the previous year. The increase added further pressure on the bottom line despite growth in interest income and the loan book.
The bank’s asset quality, however, showed improvement. Gross non-performing assets declined to 2.37 per cent by June 2026, while net NPAs stood at 0.60 per cent.
The bank’s disclosures also reveal significant differences in asset quality across sectors. As of March 2026, gross NPAs were highest in real estate at 21.66 per cent, followed by services at 7.33 per cent and manufacturing at 6.99 per cent. The overall gross NPA ratio remained considerably lower because of the size and composition of the bank’s wider loan portfolio.
Another significant shift is visible in the geographical distribution of lending. During FY 2025-26, advances in Jammu and Kashmir and Ladakh grew 9.5 per cent, while the bank’s Rest of India portfolio expanded 28.8 per cent.
According to the bank’s March 2026 disclosures, advances in J&K stood at ₹76,159 crore, while the Rest of India portfolio stood at ₹48,822 crore. The latter recorded substantially faster growth during the year.
The bank has continued to expand outside its traditional market as part of its growth strategy. Its latest figures show that this expansion is contributing significantly to overall advances growth while lending growth within J&K and Ladakh remains comparatively slower.
Despite the pressure in the latest quarter, J&K Bank recorded its highest-ever annual net profit of ₹2,363.47 crore in FY 2025-26, compared with ₹2,082.46 crore in the previous financial year.
The latest figures therefore show a bank with strong growth in deposits, advances and overall business, but facing pressure on margins and provisions as lending rates decline and competition for deposits remains high. [KNT]
