J&K Bank Q4 FY26: Profit up 36%, NPAs at 2.5%

Results snapshot: profit surge, income softens

Jammu and Kashmir Bank reported a sharp rise in profit for Q4 FY26, alongside further improvement in asset quality. Net profit rose to ₹797.80 crore, up 36.48% year-on-year and 35.97% quarter-on-quarter, while EPS stood at ₹7.24 with about 36% growth. Profit before tax (PBT) increased to ₹860.52 crore, reflecting 6.34% YoY growth and 6.76% QoQ growth. The key contrast in the quarter was on the revenue line, where total income declined to ₹3,531.06 crore. The bank’s net NPA ratio improved to 0.64%, signalling a cleaner book compared with recent periods. Gross NPA for the quarter was reported at 2.50%, described as the lowest in recent quarters.

What changed in Q4: drivers behind the bottom line

The quarter’s profit performance was attributed to cost control, better asset quality and expanding profitability margins, even as revenue remained under pressure. Net interest income (NII) stayed stable at ₹1,487.48 crore, almost unchanged from ₹1,488.88 crore in Q3 FY26, and up 0.51% from ₹1,479.99 crore a year earlier. Operating profit was ₹910.79 crore, the highest quarterly level cited in the material. The bank’s provisions for the quarter were ₹50.27 crore, which the review noted as “well under control” despite slightly impacting profitability. A favourable tax profile was also highlighted in the comparison table, with a Q4 FY26 tax rate of 7.29% versus 27.21% in Q3 FY26 and 27.76% in Q4 FY25. Overall, the numbers point to profit growth being supported more by operating and credit-cost dynamics than by top-line expansion.

Income breakdown: where the pressure showed up

Total income fell 1.68% sequentially and 2.28% year-on-year to ₹3,531.06 crore. Interest earned was ₹3,271.67 crore in Q4 FY26, marginally lower than ₹3,313.44 crore in Q3 FY26, while still showing a +1.86% YoY increase as presented. Within interest earned, interest on advances increased to ₹2,452.17 crore from ₹2,435.10 crore in Q3 FY26. In contrast, income on investments declined to ₹685.36 crore from ₹745.93 crore, indicating weaker contribution from the investment book in the quarter. Other income fell 6.65% sequentially to ₹259.39 crore from ₹277.91 crore. On a year-on-year basis, other income declined 35.43% from ₹401.68 crore in Q4 FY25, a sharp drop that the review linked to softer fee and treasury-related streams.

Asset quality: GNPA at 2.50%, net NPA at 0.64%

Asset quality remained the centrepiece of the quarter. Gross NPA declined to 2.50% in Q4 FY26 from 3.00% in Q3 FY26, a 50 basis point sequential improvement, and from 3.37% in Q4 FY25. Net NPA fell to ₹785.13 crore with a ratio of 0.64%, compared with 0.68% in the previous quarter and 0.79% a year ago, as stated in the review. The material also referenced a provision coverage ratio above 90%, indicating a high buffer against stressed assets. Separately, in commentary related to an earlier quarter, PCR was cited at 90.46%. The bank’s management commentary in the broader text emphasised recovery performance and disciplined underwriting as contributors to the cleaner loan book.

Capital and balance sheet: buffers remain comfortable

The bank’s total capital adequacy ratio was cited at 16.55%, with Tier-1 at 14.44%, both noted as comfortably above regulatory requirements. Shareholders’ funds were mentioned at ₹14,251.94 crore (as of March 2025 in the material). On business metrics, advances were listed at ₹1,04,198.72 crore (as of March 2025), reflecting an 11.13% YoY increase from ₹93,762.51 crore. Deposits were reported at ₹1,48,569.46 crore, up 10.23% YoY. The advance-to-deposit ratio was cited at 67.83%, presented as an indicator of liquidity prudence. A funding mix shift was also noted, with CASA ratio declining to 44.10% in December 2025 from 47.01% in March 2025.

Profitability indicators: ROE strong, margin signals mixed

Return on equity (ROE) was reported at 13.66%, described as strong capital efficiency. Return on assets (ROA) was cited at 1.21% in the review section, alongside a five-year average ROA of 1.00%. Elsewhere in the provided material, ROA for the quarter was mentioned as 1.78% (versus 1.44% last year), with ROA for the year at 1.37%, indicating different reporting cuts within the same compilation. Net interest margin (NIM) for the financial year was stated at 3.60%. For the quarter, NIM was cited at 3.62% (up 6 bps QoQ), and another line referenced NIM at 3.72% versus 3.86% in Q4 FY25. Operating efficiency also improved, with cost-to-income ratio cited at 55.88% versus 57.28% a year ago, and cost of deposits declining to 4.69% QoQ from 4.86%.

Stock and ownership context: market cap and recent returns

The bank was described as the designated agency bank for the Governments of Jammu and Kashmir and Ladakh. Market capitalisation was cited at ₹14,794 crore, with promoter holding at 59.40%. The stock’s one-year return was reported at 39.68%, compared with the Sensex’s -4.68% over the same period. Shorter-term momentum figures were also provided: 18.53% over the past month, 29.41% over three months, and year-to-date returns of 34.25%. The same section stated that institutional investors have been gradually increasing their stakes, though no percentage split was provided. These datapoints frame the results in the context of a stronger market perception around improved asset quality.

Key quarterly trend table: income down, NPAs improve

Company and management commentary: what the bank flagged

In the FY26 commentary included in the material, the bank reported its highest ever annual profit of ₹2,364 crore in FY26, up 13% from ₹2,083 crore in FY25. Managing director Amitava Chatterjee said the bank would focus on leveraging opportunities across geographies in the rest of the country while deepening its presence in Jammu and Kashmir and Ladakh. In other commentary tied to earlier quarters, the bank also referred to operational challenges including events in April (the Pahalgam attack) and floods that disrupted the local economy, while maintaining its focus on profitability and risk management. Separately, earlier guidance referenced a target of bringing gross NPA to around 3% by year-end through prudent lending and recovery mechanisms. In Q4 FY26, with gross NPA at 2.50%, that stated direction appears consistent with the reported trend.

Market impact and what investors will track next

The Q4 FY26 outcome reinforces a pattern where bottom-line strength is being driven by asset quality improvements and operating control, while the revenue line needs monitoring. The sharp YoY fall in other income to ₹259.39 crore and the decline in total income to ₹3,531.06 crore are the primary near-term operating concerns highlighted in the data. At the same time, stable NII of ₹1,487.48 crore and lower GNPA and net NPA ratios provide support to the profitability narrative. Investors will likely track whether income growth returns, whether NIM holds near the reported levels, and whether the CASA ratio stabilises given it fell to 44.10% in December 2025. The bank’s capital ratios, including total CAR of 16.55%, give it room to grow, but sustaining returns will depend on balancing funding costs and credit growth.

Conclusion

Jammu and Kashmir Bank’s Q4 FY26 results showed strong profit growth, led by better asset quality and operating performance, even as total income declined. The next set of updates will be closely watched for signs of revenue recovery, margin stability, and continued control over slippages and credit costs.