J&K Bank Reports Positive Financial Results for Q1 FY25, Lowest NPA Ratio and Growing Interest Income

The Jammu & Kashmir Bank, a midcap public bank, has recently announced its financial results for the quarter ending June 2024. According to MarketsMOJO, the stock call for J&K Bank is ‘Hold’.

Despite a fall in its overall score from 20 to 13 in the last three months, J&K Bank has shown positive financial performance in the quarter. One of the key factors contributing to this is the bank’s lowest gross non-performing assets (NPA) ratio of 3.91%, which has been consistently decreasing over the last five quarters. This indicates that the proportion of stressed loans given by the bank is also on a downward trend.

Another positive aspect of J&K Bank’s financials is its interest earned, which has been growing each quarter in the last five quarters and reached its highest at Rs 2,994.38 crore in the quarter ending June 2024. This shows a very positive sales trend in the near term. Additionally, the bank’s net NPA ratio has also decreased to its lowest at 0.76%, indicating a decrease in the proportion of stressed loans.

The bank’s net interest income has also been consistently increasing, reaching its highest at Rs 1,369.22 crore in the last five quarters. This shows that the bank’s core business is generating higher income. Furthermore, J&K Bank has been distributing higher dividends from its profits, with the dividend per share (DPS) reaching its highest at Rs 2.15 in the last five years. The dividend payout ratio (DPR) has also been consistently high at 13.40%, indicating that the company is distributing a higher proportion of its profits as dividends.

However, the bank’s profit after tax (PAT) for the quarter ending June 2024 has fallen by 6.0% compared to the average PAT of the previous four quarters. This indicates a negative trend in the near term. Despite this, J&K Bank’s overall financial performance for the quarter has been positive, with several key factors working in its favor.