Big profit drop for Jana SFB in Q3, but deposits and asset quality offer comfort

Jana Small Finance Bank on Friday, February 6, reported a sharp decline in profitability in the third quarter, with net profit plunging 91.2% year-on-year to ₹9.7 crore, compared with ₹110.6 crore in the year-ago period.

Despite the drop in profit, the bank’s core income remained steady.

Net interest income (NII) rose 13.8% YoY to ₹675 crore, up from ₹593 crore in the corresponding quarter last year.

On the asset quality front, the bank showed improvement on a sequential basis. Gross non-performing

assets (NPA) declined to 2.59% from 2.87% in the previous quarter. Net NPA remained unchanged at 0.94% quarter-on-quarter.

Total deposits grew 30% year-on-year to ₹33,733 crore. 

Ajay Kanwal, MD and CEO, Jana Small Finance Bank commented that the bank’s profit after tax for the third quarter was below expectations due to higher credit provisioning. He added that the bank expects credit costs to moderate from the fourth quarter onward as NPA inflows ease.

"The operating environment requires us to be cautious, particularly in certain unsecured segments, and therefore we continue to cover all new unsecured disbursals under guarantee programs. We shall be eligible to claim meaningful amount from Guarantee programs starting FY27 which will help in improving Bank’s RoA by about 50-70 bps. Our Secured book is growing at a steady pace across all products," Kanwal added.

Headquartered in Bengaluru, Jana SFB is the fourth largest small finance bank in the country.  Shares of the company were up 2.28% for the day, closing at ₹354 apiece.

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