Sharesof J&K Bank Ltd.fell 14% on Friday, October 23, after the lender reported mixed earnings for the September quarter.
It’s operating profit growth was strong and its asset quality improved but its weak net interest income (NII) growth and continued net interest margin pressure (NIM) remained key concerns.
This is its biggest single-day fall since June 4, 2024, when the stock had declined 20%.
The bank’s operating profit increased 26.7% to ₹789.14 crore from ₹622.62 crore last year. J&K Bank’s profit after tax increased 10.6% to ₹546.36 crore from 494.11 crore in the second quarter last year.
The lender’s gross non performing assets (NPA) improved to 2.23% from 2.37% sequentially and its net NPA also contracted to 0.51% from 0.6%.
J&K Bank’s net interest income (NII) came in at ₹1,502.31 crore, up 4.8% from the previous year’s ₹1,455.99 crore.
Meanwhile, its NIM contracted to 3.17% from 3.56% in the year-ago period and from 3.28% in the previous quarter.
Its gross slippage ratio in the second quarter declined to 0.35% from 0.89% last year and 0.45% last quarter.
The lender’s return on assets were at 1.07% compared to 1.16% last year and up from the previous quarter’s0.87%.
Return on net worth contracted to 13.68% from 14.37% in the year-ago period but expanded from 11.11% sequentially. Its yield on advances in the second quarter was at 8.55% compared to 9.2% last year and 8.56% in the previous quarter.
Cost of funds in the second quarter was at 4.95% in comparison to 4.94% and 4.87% in the previous fiscal and quarter, respectively. Its cost of deposits declined marginally to 4.85% from 4.86% last year but increased from 4.74% in the quarter-ago.
The lender’s yield on investments was at 6.58% in the September quarter from 6.7% in the prior fiscal and 6.6% in the previous quarter.
Its credit cost increased to 0.25% in the second quarter from 0.02% in the previous year and 0.10% in the prior fiscal.
The lender’s deposits increased by 16.3% to ₹1.76 lakh crore from last year and was up 1.9% from the previous quarter. Its net advances were up 24.8% at ₹1.31 lakh crore and gross advances were up 23.7% at ₹1.33 lakh crore from the year-ago period.
In an interaction with CNBC-TV18 on Friday, J&K Bank’s MD & CEO Amitava Chatterjee said that he believes margins have made a bottom this quarter and that they will improve from here on.
He said the previous year was a tough one and hence the lender had to go for high-cost deposits and competitive rates in loans. 65% of the loans of the bank are linked to Repo and around 15% are linked to MCLR, he added.
Shares of J&K Bank fell 14.3% to hit an intraday low of ₹115.8 apiece on Friday. The stock was down 13.3% at 12.13 pm. It has fallen 21.3% in the past month but has gained 16.2% in 2026, so far.
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