J&K Bank shares slip after posting Q3 results; What's worrying investors?

Jammu & Kashmir Bank (J&K Bank) shares dipped 4 per cent in trade on Tuesday, logging an intraday high at Rs 94 per cent. The selling in the stock came after the company released its Q3 numbers on Monday, after market hours.

 

Around 12:07 PM, J&K Bank shares were down 1.84 per cent at Rs 96.15 per share on BSE. In comparison, the BSE Sensex was down 0.04 per cent at 77,046.23. The market capitalisation of the company stood at Rs 10,576.86 crore. The 52-week high of the stock was at Rs 152.45 per share and the 52-week low was at Rs 86.70 per share. 

J&K Bank Q3 results

The private sector lender on Monday reported a 26.2 per cent rise in net profit to Rs 531 crore for the October-December quarter of FY2024-25 compared to Rs 421.08 crore in the year-ago period.

 

The net interest income (NII) for the quarter under review stood at Rs 1,509 crore, up 17 per cent, as compared to Rs 1,280 crore a year ago. 

 

However, the gross non performing asset (GNPA) has increased to 4.08 per cent quarter-on-quarter (Q-o-Q) basis as compared to 3.95 per cent in Q2. GNPA refers to the total value of all loans that have become non-performing, regardless of the provisions made by the bank to cover potential losses. 

  Net non-performing assets (NNPA) have also increased to 0.94 per cent as compared to 0.85 per cent in Q2. NNPA refers to the amount of non-performing loans after accounting for the provisions made by the bank to cover potential losses from those loans.

 

“These Q3 results reaffirm our strong fundamentals and operational efficiency. A 26.2 per cent year-on-year (Y-o-Y) increase in quarterly net profit, along with a 32.7 per cent rise for the nine-month period, highlights our sustained focus on delivering value to stakeholders while navigating dynamic market conditions. Driven by efficiency gains, our Cost-to-Income Ratio has also reduced by over 5 per cent Y-o-Y," said Amitava Chatterjee, MD & CEO, J&K Bank. 

 

Chatterjee added:  Asset quality will continue to be our focus with added emphasis, so that we meet our market guidance of GNPA 3.5 per cent comfortably by the end of the fiscal.

 

He also said that the bank is planning to strengthen its focus on priority sector lending, particularly agriculture and MSMEs, while exploring growth opportunities in emerging markets in the rest of the country. 

 

In the past one year, J&K Bank shares have lost 25 per cent against Sensex's rise of 9.5 per cent.