Jana Small Finance Bank Ltd reported a mixed performance in its Q2 FY25 results, reflecting both growth and challenges in key areas. The private lender's net profit declined by 21.3% year-on-year (YoY) to INR 96.7 crore, down from INR 122.8 crore in the same quarter last year. This drop in profitability came despite a 13% rise in net interest income (NII), which stood at INR 594 crore, up from INR 525.8 crore in the corresponding quarter of FY24.
The decline in net profit was attributed to a rise in the bank's gross non-performing assets (NPA), which increased to 2.97% in Q2 FY25, compared to 2.62% in the previous quarter, signaling a slight deterioration in asset quality.
On a positive note, the bank’s loan assets under management (AUM) grew by 17% YoY, reaching INR 26,411 crore, with 65% of the assets secured. While secured loans grew by 16% in the first half, unsecured loans saw a decline of 7%, reflecting the bank’s cautious stance in riskier segments.
Deposits saw a robust 31% YoY growth, reaching INR 24,808 crore, with CASA (current and savings account) deposits rising 28% to INR 4,977 crore. The CASA ratio stood at 20.1% as of September 2024, up from 19.7% in March, indicating an improvement in low-cost funding.
The bank's capital adequacy ratio (CAR) remained healthy at 18.8%, while its tier-1 capital stood at 17.8%. Including interim profits for the first half of FY25, CRAR improved to 20.3%, and tier-1 CRAR stood at 19.3%. Additionally, the liquidity coverage ratio (LCR) was strong at 261%, ensuring the bank’s ability to meet short-term liquidity needs.
Despite a challenging quarter for profitability, the bank maintained a stable cost-income ratio of 58.3%, with a return on assets (ROA) of 1.6% and a return on equity (ROE) of 14.5%. Shares of Jana Small Finance Bank Ltd, however, fell by 3.83%, closing at INR 508.25 on the BSE, reflecting market concerns over rising NPAs and the profit decline.
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