J&K Bank shares tumbled 14.3% on Friday, closing at ₹115.8, the steepest one‑day fall since June 4, 2024. The dip followed the bank’s Q2 earnings, where net profit after tax climbed 10.6% to ₹546.36 crore from ₹494.11 crore a year earlier.
Operating profit surged 26.7% to ₹789.14 crore, beating the previous year’s ₹622.62 crore. Nevertheless, the lender’s net interest income (NII) increased only 4.8% to ₹1,502.31 crore, a modest rise from ₹1,455.99 crore last year, and the net interest margin (NIM) slipped to 3.17% from 3.56% a year ago.
Asset quality improved: gross non‑performing assets (NPAs) fell to 2.23% from 2.37% sequentially, and net NPA contracted to 0.51% from 0.6%. Slippage ratio dropped to 0.35% versus 0.89% a year earlier. Return on assets (ROA) slipped to 1.07% from 1.16% YoY, while return on equity (ROE) fell to 13.68% from 14.37%.
Deposits grew 16.3% to ₹1.76 lakh crore, and net advances rose 24.8% to ₹1.31 lakh crore. CEO Amitava Chatterjee told CNBC‑TV18 that the bank’s margins have hit a low this quarter and are expected to improve. He added that 65% of loans are repo‑linked and 15% MCLR‑linked, explaining the higher cost of deposits.
Looking ahead, the bank will release guidance for Q3 on December 15. Analysts note that the NIM squeeze could weigh on profitability unless rates rise. The sector has seen mixed momentum, with peers reporting similar margin pressure, but J&K Bank’s asset quality trajectory remains a positive signal for investors.