Financial Performance and Margins
Jana Small Finance Bank reported a robust financial performance for the quarter ended June 30, 2026, with profit after tax reaching ₹155 crore. This 52% year-on-year growth was primarily driven by a 33.4% increase in Net Interest Income and a notable reduction in the cost of funds, which dropped by approximately 50 basis points to 7.44%. The bank's Net Interest Margin (NIM) witnessed an expansion to 7.5%, up from 6.6% in the corresponding quarter of the previous year.
Operational efficiencies are also coming into play, with the bank leveraging AI and RPA-led automation across various functions, resulting in nominal operating expense growth of 1.5% on a sequential basis.
Strategic Shift Toward Secured Assets
The bank continues to execute its strategy of increasing the proportion of secured loans, which now account for 72.8% of the total portfolio. Secured assets grew by 29% year-on-year, with exceptional performance in the gold loan segment, which surged 113% YoY, and vehicle loans, which rose by 78%. While unsecured book growth remained steady at 18% YoY, management highlighted that approximately 80% of this portfolio is covered under various guarantee programs.
Asset quality showed sequential and annual improvement, with GNPA and NNPA moderating to 2.24% and 0.85% respectively, supported by lower slippages that decreased by 43% compared to the first quarter of the previous fiscal year.
Liability Franchise and Capital Adequacy
On the liabilities front, Jana SFB recorded a 22% year-on-year growth in total deposits, reaching ₹35,756 crore. The bank's focus on granular deposits yielded a 31% YoY increase in CASA balances, bringing the CASA ratio to 19%. Retail term deposits also showed strong momentum, with 96.6% of retail deposits now contracted for tenures of one year and above.
To support future growth, the bank's board approved the issuance of share warrants for Tier-1 capital worth ₹728 crore under the preferential route, of which ₹103 crore was received in June 2026. The bank's Capital Adequacy Ratio (CRAR) remained healthy at 20.2%, providing sufficient headroom for planned expansion.
Promoter De-promoterisation and Outlook
The bank addressed the technical default on NCD payments by its promoters, JHL and JCL, clarifying that there is no cross-default linkage with the bank's own debt. The promoters, who currently hold a 16.9% stake, plan to reduce their holding to less than 9.99% and seek de-promoterisation approval from SEBI and RBI. Despite the bank being put on a rating watch by India Rating following these developments, CARE Ratings has retained the bank's credit rating.
For FY27, management has provided optimistic guidance, targeting profit growth exceeding 80% and gross loan portfolio growth between 19% and 21%, while continuing to build a sustainable and governance-led long-term franchise.
