Thank you, operator. Good evening, ladies and gentlemen.

I welcome you all to Jammu and Kashmir Bank's post results conference call for fourth quarter, financial year 2026, hosted by Emkay Global. From the top management, we have with us Shri Amitava Chatterjee, MD and CEO, and other top management.

First, I would request the MD, sir, to briefly summarize the key highlights from Q4 FY '26, FY '26 results, and also provide some strategic direction on growth, margins, and asset quality, post which we will have the Q&A session. Over to you, MD, sir.

Thank you, Anand. I'm audible, I suppose?

Yes, sir. You're audible.

A very good evening and a warm welcome to all the investors, analysts, and other stakeholders joining us today for the Jammu and Kashmir Bank March 2026 earnings call. As mentioned, I would definitely be brief.

Before starting with the numbers, let me introduce my fellow colleagues from the bank's senior management who are accompanying me on this call: Executive Director Mr. Sudhir Gupta; Chief General Managers Mr.

Sunit Kumar, Mr. Imtiyaz Ahmad Bhat, and Mr.

Ashutosh Sareen; Retail Banking Head Mr. Rakesh Magotra; Corporate Banking Head Mr.

Suresh Kumar Choudhary; Impaired Assets Portfolio Management Head Mr. Irfan Anjum; Chief Financial Officer Mr.

Ketan Kumar Joshi; Chief Risk Officer Mr. Altaf Hussain Kira; and our Treasury Head Mr.

Ajay Kohli. Financial year 2026 marks yet another milestone year for the bank as we have fulfilled our promise and delivered a fourth consecutive year of record annual profitability, posting a net profit of ₹2,363 crore for the financial year.

What sets this achievement apart and makes it more special is the backdrop in which it has been achieved as FY '25-26 was laced with frequent challenges, especially in our core geography of Jammu and Kashmir, besides global uncertainties. The ability to sustain the trajectory in this challenging environment is a reflection of a structurally stronger and a resilient franchise that has been built over a period of time, along with the adaptability of our business model.

Besides ending the year with the highest-ever annual net profit, we have also ended the financial year with a record quarterly performance posting a net profit of almost ₹800 crore, recording a 36% Q-on-Q growth. We are also pleased to have been able to broadly deliver on our market guidance, surpassing the same comfortably on most parameters, despite all the challenges faced.

The only exception has been a marginal shortfall in the NIM, where we have fallen short of our guidance. This is largely on account of the cumulative rate cuts of 125 bps by RBI in 2025, which has impacted yield on advances, coupled with intense competition from deposits, resulting in lower transmission of the reduced rates on the liability side.

The bank has registered a business growth of 13.6% during financial year '25-26 with deposits and gross advances growing at 11.3% and 16.8%, respectively, both comfortably exceeding our guidance for the financial year. In accordance with our recalibrated strategy for the fiscal, the loan growth in ROI was much higher at 28.8% vis-à-vis 9.5% of Jammu and Kashmir and Ladakh.

This has led to a marginal shift in the regional composition of the loan book, with Jammu, Kashmir, Ladakh contributing 63% and rest of India contributing 37% as on 31st of March 2026, in alignment with the bank's medium to long-term vision of geographical diversification with a 50-50 business split between Jammu, Kashmir, Ladakh and rest of India. Retail, agriculture, and MSME loans, that is RAM, continue to constitute a dominant segment of our loan book with more than 2/3 share.

During FY '25-26, corporate and agriculture segments have recorded a robust growth of 38.5% and 27.6%, respectively. Our personal loan segment in rest of India has also gained traction with a growth of around 13% recorded for the year.

Amongst personal loans, car loans has been the best-performing segment across all divisions with a growth of 17.5%. In the rest of India division, housing and education loans have also recorded a double-digit growth.

In deposits, both Jammu, Kashmir, Ladakh and rest of India have recorded double-digit growth. The growth in term deposits is 14.2%, has been higher than the growth in CASA deposits at 8.1%, in line with the broad industry trend.

However, on a sequential basis, growth in CASA deposits has substantially outpaced the growth in term deposits, resulting in a bank being able to improve its CASA ratio from 14 44.10% as on 31st December '25 to 45.65% as on 31st March 2026, thereby surpassing our guidance of 45%. While we have witnessed some moderation in NIM during the year, as mentioned this at the start of this call, with NIM of FY '25-26 being recorded at 3.60%, the decline has been relatively contained, specially when seen against the backdrop of cumulative rate cut of 125 bps by RBI in the calendar year 2025.

Despite pressure on net interest income owing to the contractions in NIMs, as well as a hit on our other income on account of impairment provision of ₹180 crore along with a sequential moderation in our trading income triggered by an uptick in bond yields owing to the geopolitical developments, we have still been able to record a 13.5% growth in our annual profit. A key driver in this improved profitability has been operating leverage, with operating expenditure reducing by around 4%.

As has been indicated previously also by the bank, the cost of reduction has been brought about by a moderations in our employee costs, with tapering of pension-related obligations and shift of our workforce composition towards NPS. This reduction of costs has also been complemented by enhanced operating efficiency, as evidenced by steady improvement in key productivity metrics, with business per employee improving from ₹20.18 crore as on 31st March '25 to ₹23.64 crore as on 31st March '26, and net profit per employee improving from ₹16.65 lakh to ₹19.47 lakh during the same period.

Cost-to-income ratio also continues to moderate for the fourth year running, being recorded at 56.18% for the financial year. With this record profitability performance, we have also surpassed the guided ROA and ROE levels, with ROA and ROE of 1.37% and 16.85%, respectively, for the financial year.

The consistent improvement in asset quality alongside a healthy business growth, now extending to six consecutive years, continues to remain a hallmark of our performance and reflects our commitment to responsible growth. GNPA and NNPA as on 31st March 2026 stand at 2.50% and .64%, respectively.

This demonstrates a structural strengthening of our underwriting discipline alongside a tight control over slippages, with gross slippage ratio of just around .82% for the year. Improved recovery mechanisms have also played a crucial role, with another year of negligible credit costs, despite a relatively challenging economic environment.

Our provision coverage ratio also continues to stay above 70 90%, reflecting adequate buffers. With another year of record internal accruals, we have achieved highest-ever capital adequacy of 16.55%, with CET1 at 13.54%.

However, considering that RBI has notified ECL implementation with effect from 1st April 2027, the bank will consider raising of capital to the tune of ₹1,250 crore in the current year at an opportune time, for which the bank has already obtained both board as well as shareholders' approval. Despite a broad-based exodus of FIIs from Indian markets during 2025 with outflows of around ₹2.4 lakh crore, our bank has witnessed an increase in FII shareholding to 8.34% as on 31st March '26 from 7.64% a year ago.

This is a recognition of our transformation journey and consistently improving performance. The ongoing geopolitical tensions in West Asia, which has led to the World Bank slashing India's growth forecast for '26-27 from 7.2% to 6.6%, call for a degree of caution in our immediate future outlook.

In light of this evolving external environment, we have taken a conservative stance in our market guidance for '26-27, which is a credit growth of 12%, deposit growth of 10%, CASA at 45%, NIM around 3.5%, ROA maintained around the current levels, ROE around 16%, and gross NPA below 2.25%. While it may seem like we are underpromising, rest assured that we will strive to overdeliver, like we did this year.

Thank you for your time today and for giving me a patient hearing. We can start the question-answers now.

Operator, please open up the floor. Yeah.

Hello. Congratulations, sir, on good set of numbers in challenging times.

My question is regarding the employee cost, which you mentioned in your opening commentary that we have tried to maintain it. This quarter, the employee cost has come to ₹509 crore versus last year same quarter it was ₹734 crore.

Similarly, on a full-year basis also, we've seen a reduction of 11%. I wanted to know going forward for the next year, what trend are we looking at in the employee cost?

Thank you very much for the comments. Definitely, see, there are two basic reasons for the reduction in employee cost.

One, as I mentioned, that our pension obligations are being now shifted to NPS, so that is coming down gradually. Second is, of course, over the last couple of years, we have had retirements.

The number of employees have also gone down. The employee cost has come down.

The shortfall in the employees have been largely compensated by the use of technology that we have been able to leverage on. That doesn't mean that we will not be recruiting people.

As and when required, we will definitely be recruiting people, but going forward, I believe that staff costs will further come down, even in the next quarter and the quarters after that.

Okay. Overall, as a percentage what it used to be in the past of the earnings, it will tend to be lower?

Yes. It has been lower for the last, I think, couple of years.

Okay. Thank you, sir.

Thank you.

Hello, sir. Congratulations on wonderful set of numbers and giving out your comments with such clarity.

Sir, as the previous participant asked about the employee cost. Sir, is it fair to assume that the quarterly run rate for employee cost starting from Q1 onwards, it is going to be ₹500 crore or lower?

Is that a fair understanding to take?

Thank you, Gaurav, and it's a very fair estimate that you made. At least for the next two quarters, I'm certain that it will be around that.

Sir, for full year, can it be contained below ₹2,500 cr?

Why I am saying that first two quarters is I do have some intention of getting some employees into the bank, especially specialized people to take care of various specialized positions in the bank. Then that will not add to the cost because the lowering of the cost in the last say six to seven quarters has been substantial and that will continue.

It will not add to the cost, but yes, 2,500 if you are considering, it is a fair estimate.

Great, sir. Sir, other operating cost, this time it has gone up around 13-14%.

Similar kind of growth we can see for next year?

We will try to contain the operating costs, definitely, but I think it will definitely average out.

Got it. Sir, lastly, on the provisions, if you can help us, what should we expect on the provisioning as a whole without taxes?

I don't know how many quarters we have delivered a zero credit cost situation.

Sir, for us, the more, the merrier.

I believe we still have some amount of NPAs in pipeline which will be recovered in the coming quarters. I believe that provisioning will not be something which will be alarming.

I cannot predict at the moment. Even I had said last year that I cannot predict, but we maintained a zero credit cost situation.

Great, sir. Thank you so much, and I understand that you have given a conservative growth guidance,

and hopefully, we will So, that is essentially because of the situation that is going around,

but then

I gave the similar kind of guidance last year, and I think we overachieved by several basis points.

Correct, sir, correct. Hopefully, this time also, we do the same, and congratulations, and all the best for the next year.

Thank you. Thank you very much.

How are you? Congratulations on good set of numbers.

Thank you, Sonaal.

Sir, I had a couple of questions. If you allow me, can I ask three?

Yes, please.

Sir, firstly, your miscellaneous income has fallen substantially Y-on-Y. Was there a one-off last year in Q4 or is there any one-off this year in Q4, because of which it's fallen?

That's my first question.

I answer this question first? Other income has fallen because of the one-time provision of ₹180 crore for Gramin Bank.

That EDB amalgamation with our Gramin Bank, that was taken in the other income head. That is the reason.

Otherwise, we are almost at par with last year.

I could not actually fully understand. Your other income has fallen.

What is to do with Gramin Bank, I could not follow.

The impairment of the investment in Gramin Bank because of the amalgamation of EDB, as per the instructions and the guidance of NABARD, we had to make a impairment of ₹180 crore on account of this amalgamation, and we are the sponsors of J&K Gramin Bank, and Ellaquai Dehati Bank, EDB, which was sponsored by SBI, was amalgamated with us. That bank was in a very bad state.

It was in a very bad state. In fact, it had eroded entire net worth.

While we should have not been required, we had represented with all the authorities including finance ministry. Then it was a policy decision that was taken for all the banks, all the regional rural banks that were amalgamated.

On account of that, we had to take an impairment, and that was classified in the other income head. That is the reason it went down.

Sir, second question, when you talked about the increase in employee cost, what is the increase in employee cost? Because initially you said that it will fall, then you said they will hire.

If you could just give some idea, is it going to increase in absolute terms compared to FY '25-26? Is it going to be lower as to increase, what is it like?

What kind of percentage is rough?

It will not increase when I say that I will hire. See, it's a very simple arithmetic when you hire in a bank.

You lose people on account of retirement who are high-paid individuals, and when you hire, they come at a lower cost. Obviously, the cost will not go up, cost is definitely going to go down.

We still have a substantial number of people retiring this year, and also, as I mentioned, the cost of the pension liabilities that we have, that has been shifted to NPS. That is the reason why I said that employee cost will not go up.

Employee cost will steadily come down. The rate of reduction might be slightly reduced if we hire people, and that also is not going to happen for the first two quarters of next year.

If we are able to hire, the impact will come only in the third and the fourth quarter.

Sir, just to put things in context, you ended at almost a ₹2,500 crore employee cost this year, 2,480, and this quarter is ₹509 crore. There was no one-off in this ₹509 crore, right?

No, no, no. No one-off.

Reversal.

Okay.

Oh, achha. There was a reversal of

₹153 crore for Q4. Haan.

That was on account of Discount rate change in retired Haan, the discount rate change in retirement benefits. Because of that, we had a one-off reduction of ₹153 crore in this quarter, right.

Because

Q4 is typically of peak employee cost.

Correct, correct, correct. Okay.

You're saying overall on a yearly basis, this ₹2,500 crore number is unlikely to grow up, even as your loans grow by 12% or whatever numbers is possible. Yes, yes.

Yes, yes. It's not going to grow, right.

Sir, you had talked about being large number of changes in the bank sometime back. How do they progress well, and because of those changes, you were actually expecting to accelerate your growth at some point of time.

Where are we in the cycle? Are you in the late stages of those changes?

Are you still in the early stages of those changes? I missed your ROA guidance.

If you could just repeat that for us. Thank you.

ROA, we are going to remain where we are, 1. 37.

We wish to maintain it at that. Right, you talked about the initiatives taken.

I guess I have lost count on the number of initiatives that we have taken this financial year, and very happy to share that all the initiatives are now in place and functioning. They are not any stage.

They have started functioning. For example, we have the clusters, the change in the reporting structure of cluster heads, we have the CPCs in place, we have all those control mechanisms that we needed to apply in the bank.

A host of all those initiatives were taken early, and also the initiatives related to technology also, getting many additional softwares which will help us in generating more business. Most of them have been already put in place.

For example, we have a end-to-end digitized loan journeys now for all loans, not only retail loans, all loans. These are certain initiatives which have already been completed, and they have started showing results.

The TAT in case of our corporate, mid-corporate, and SME loans have come down substantially in the last quarter. Now, this year, we intend to consolidate, instead of initiating more new initiatives, we intend to consolidate on the initiatives already taken, ensure that they are functioning at its best and efficient best, and get the maximum out of them.

The HR initiatives, for example, I forgot to mention, for the first time in the bank, we have completed the entire set of promotion exercise for the bank within March. Everybody has been placed in their new positions, start doing business from the very first month itself, and it has shown result.

The first-month figures that I have with me end of April, they are far better than any April of previous years. If you ask me if they're showing results, they are definitely showing results.

Therefore, sir, you should grow much faster than the system-wide loan growth. Let's say the entire country's loan growth grow at 12, 13, 14%, do you expect to grow much faster than the system loan growth, or you expect to match it, or grow lower than that?

See, I gave this conservative figures only because of the environment around. If the system grows at 16%, I would definitely want to grow more than 16%.

That is given. You can take it from me.

Wonderful. Thank you so much.

Hello. Good evening, sir.

Thank you so much for taking my question, sir. A lot of my questions have already been answered.

Just sorry to harp on our guidance. ROA in Q4 also I think we were able to do around 1.7, 1.8%.

I understand we want to be conservative, but just for us, we can at least expect our Q4 to be maintained, right, in terms of ROA, sir?

Quarter-on-quarter, you are saying?

We should not have a decline, right?

What I gave the guidance is not for the quarter, for the year ahead. Definitely, see, not every quarter we will have a profit improvement of 33%, right?

We need to keep that in mind. Yes, I told you in the beginning only, whatever guidance we have given, they are the base guidances that we are trying to give.

The ultimate numbers would be much better that I can assure.

Fair enough, sir. That's it from my side, sir.

Thank you.

Thank you.

Hello?

Yes, hi, Mona.

Hi, sir. Good evening, and congrats on the quarter.

Firstly, I think it was a great move not to pay out dividend in order to conserve capital. I have two questions in particular.

Firstly, when I look at your segmental growth, the financial markets book has grown very fast in the last one year, almost doubled, the mix has almost doubled. What is driving this growth?

What are the constituents in this book that is driving the growth? See,

if you look at the entire industry, this financial year has been excellent for the NBFCs. The NBFCs have grown, and NBFCs grow when they get a lot of banking support.

If you compare it with previous years, we have actually been able to have some good NBFCs onboarded with good returns from them. This year, we have had some very good NBFCs, all highly rated NBFCs, and that is the reason why this segment is showing a higher growth.

Does this also include the co-lending book that you do, and what could be the size if at all this year versus last year of the co-lending book within this?

See, last year, we started co-lending very late. Last year, it is still yet to give any substantial numbers, but this year we have a target of, say, around ₹1,000 crore to start with, and we have a board approval of going up to ₹5,000 crore.

Then we will wait and watch how it actually pans out, because the co-lending activity has just started late in the fourth quarter.

You're saying that out of that ₹20,000 crore of financial market book, co-lending is not a very material part?

No, no, not yet, not yet, not yet.

This is mostly driven by lending towards NBFCs?

Yes.

Okay. Secondly, you mentioned about this impairment provision of ₹180 crore for Gramin Bank.

This is not related to Q4, right? This is mostly for the full year, which is H1 you made some provisions.

Is that the correct understanding?

Yes, it is for the entire year.

This year, this was not part of the other income line, correct?

This year.

This quarter, I mean. This quarter, sorry.

No, not this quarter, not this quarter.

Okay. Noted.

Just finally, if you could throw some light on the ECL impact as a percentage of net worth, what could be the impact in your case?

See, before giving you any kind of a number, I would like to mention that each bank will have its own model, a board-approved model for calculation of ECL under the overall guidance of the circular issued by Reserve Bank of India on this. It will not be very accurate if I say what kind of provisioning this bank will have to make for the period of 5 years, because on both counts with the data available for the banks and the kind of improvement that the banks can make over a period of time on many aspects, specially on Stage 2 and Stage 3 ECL requirements.

I can say that if I take the base requirements of the circular given by RBI, for a period of 5 years, I think our bank will need to provide for around ₹16-1,700 crore.

Okay. Just one final thing, you mentioned about

Mona

Congratulations for good set of numbers. Could you just say again the guidance numbers which you said in the beginning?

Yes, thank you, Arman. The conservative guidance number that we have given: credit and deposit, both at the same levels of last year guidance, that is 12% and 10%; CASA at 45%; NIM around 3.5%; ROA to maintain around the current levels; ROE would be around 16%; and gross NPA below 2.25%.

Below 2.5%, okay.

2.25%.

Yeah.

2.25%.

Okay. Sir, previous participant have already asked, because ROA for our Q4 exit is already very high, and we are giving comparatively a very very conservative guidance.

Anything more to harp upon it, that's it from my side.

See, I I I told you, we had as have very good profit growth during the last quarter of this year, last financial year. It It was almost a 33% jump from December profits.

I do not expect every quarter to have a 33% jump on profits. That is the reason I have given.

Of course, like like you, you would like to see the the ROA to be at around 1.7, 1.8. I would like it to be better, but then the guidance that I give is based on some some realistic, conservative assessment.

Then you can rest assured that it is not going to be worse than this, it is going to be better than this.

Okay. Thanks.

That's it from my side. Thank you.

Thank you.

Thanks for giving this opportunity. Sir, my question relate to NIM guidance of 3.5%, but if you see the scenario, the rate cycle is now over.

You will be getting some benefit in the coming quarters, or is there anything more you need to factor in before it start reversing?

See, the answer to your question is a little bit deep, considering the fact that why we have given a 3.5% guidance on NIM. You are very right.

It is likely to improve, because the interest rates on advances have already been passed through, and the deposit rates benefit is likely to accrue in the coming quarters. The fact that this geography had a difficult time last year, and the personal segment, which is more or less majorly contributing to our interest income from this geography, was largely affected last year.

We compensated it with different strategies, which I've already mentioned earlier, but the impact of that will at least be there for some time, the low interest income that we have been able to generate from Jammu and Kashmir, which will take around one 1.5 quarters to be regenerated. That is the reason I have given a NIM guidance of 3.5%.

Otherwise, I must say that it will be on a upward trend.

Okay. Sir, second question, if you can share the data about SMA-1 and SMA-2 data?

Just give me a second. Total SMA, if you look at March to March, March '25, we had 20 ₹3,087 crore, that is 22.33% of advances as SMA, which has come down to ₹14,724 crore, that is 12.07% of the advances, that is almost 10 percentage points reduction in SMA.

From December to March also, we have a reduction from 12.58% to 12.07%. Now SMA-1 has come down from 5.54% to 4.44% March Y-o-Y.

SMA-2 is slightly higher at .71%, which was .35% last year. From December, which the SMA-2 was 2.92%, we have been able to reduce it to .71%.

Sir. Great.

Thank you very much for your answers.

Sir, thank you for the opportunity. Just wanted to know that your yield on advances has been declining, how are you planning to improve the yields for FY '27?

The yield has decreased on account of the repo rate cut that has happened in the last financial year. Also I mentioned that, because of the situation in this state, we had a hit on our retail advances.

The financial year '26-27, we are concentrating on retail advances, including what we did in agriculture. The retail advances have high returns, definitely the yield is going to improve this year, because last year largely we had to compensate the low growth in this geography by doing some corporate advances, and that highly rated, which are the only ones we target, the highly rated corporates, the rate of interest are very, very competitive.

Slightly that has impacted the yield. Going forward, the focus and the concentration is on the 2/3 part of our loan book, that is the retail, and we are going to concentrate on that to improve our yields.

Sir. Thank you.

Thank you, Pranay. Thank you very much for your kind words.

Yes, the competitive landscape has changed quite a bit in Jammu and Kashmir. While we still maintain a market share of 60%, the branch share is only 37%.

Now that 60% might sound very good as of today, but it has come down substantially from last 2 to 3 years. Then, last year, we did a lot of improvement in our customer services, and we also opened branches at strategic locations in Jammu and Kashmir.

To answer a part of your question, yes, other banks are also opening branches, but mostly in the urban centers of Jammu and Srinagar. Yes, a few branches have been opened in the areas which you mentioned, but these are the places where we actually still hold close to 80-85% market share.

There, I don't see much of a competition. The competition which is coming is largely coming in Srinagar and Jammu.

In the last one year, and I don't have the RBI data, but I believe that we have been able to restore a bit of lost market share that we have lost in the last few quarters in the last financial year. I'll be waiting for the numbers to come, but we have been able to get back quite a few accounts which we had lost earlier.

Fair enough. Thank you, sir, for that.

I'm very happy with the progress that the bank is making. Sir, just in terms of customer services, just to sort of highlight on that, I've spoken to a lot of our customers and I personally gone through our app, the mobile app that we have on Apple and on Google Play Store.

While there have been improvements, sir, I think you would agree that there is still a large scope for us to further improve on the UI, UX, on the ease of doing business for a retail customer, whether it is a household in Jammu and Kashmir or a horticulture farmer and so on, or a business person. If I could just request your technology team, to work a little harder on the mobile app and other ancillary service touch points at the branch level, I think we could do much better than we are doing, sir.

Thank you very much for this suggestion, Pranay. Just want to mention two things on this.

The first aspect See, we had had a revamp of the mPay Delight app that we have recently, about 12 months ago. Now we have a fairly robust app, but then the first aspect that we are currently looking at is totally having a 100% uptime for all the systems that we have, including the app.

That is our first aim. If you have been following the bank and the app closely, you would have noticed a marked difference in the last couple of months or three months, maybe, in the uptime.

That was our first aim, and we have been able to contain the downtime to quite a bit. The second part is improvement in the facilities in the app, the services.

That is second, and we are working on it. We are closely watching what the other banks have in offer, and not only that, we have a few good things coming up on our own.

Definitely, we are working on both counts, in a couple of months' time, you will be having a much better experience on the app front. Yes.

Thank you so much, sir. I'll come again next time.

Thank you so much, and best of luck for the new year, sir. Thank you.

Thank you.

Hi, sir. This is Sonal Minhas.

I hope I'm audible.

Yes, Sonal.

Sir, two questions from my side. I see that the gross NPA under the category of trade in your sector-wise credit deployment has come down significantly quarter-on-quarter.

Last quarter, the gross NPA was 765 cr, and this quarter, the number is 597 cr. Could you just give some subjective color on what has happened in this particular category?

That's my first question. Yeah.

See, I mentioned in the beginning itself, we have been very, very focused on recovery mechanisms. We have been very closely monitoring the accounts and focusing on recovery efforts.

We have been able to contain the SMAs, which have not given rise to any further slippages. The slippage ratio is also contained.

That is one aspect, and a bit of it also would be a technical write-off that we have done in the last quarter. A few small accounts have also been written off where the NPAs have been there for more than 3 to 4 years where recoveries have not come.

It is a combination of both.

Got it. My broader question was which category amongst these is sticky basically when we talk about trade, real estate, infrastructure, and services?

Are we seeing some categories here in terms of sectors where the NPAs are sticky?

To be very honest with you, Sonal, I have been trying to find out one category or one segment which is sticky for the last one 1.5 years that I have been here. I have not found any.

Very, very honestly, I'm telling you, I have not found any particular category which is sticky. The very fact that even the stickiest of all categories in the country, that is the agri, we have the least NPAs in agri.

I would not categorize any segment as sticky.

Understand that, sir. Sir, from a color of the NBFCs you're lending to in the financial markets, could you highlight broader sector segments you are lending to in financial markets, like are there more MFIs, are there more CV NBFCs?

If you could just slice this a bit for me, that will help understand.

My CRO is smiling at me listening to your question. No MFIs, zero MFIs.

We have not lent to any MFI. All the companies that we have lent to, the NBFCs, are all AAA-rated.

Number one. Number two, they are primarily in the housing sector,

some

in the public sector, like IRFC. Then there is a bit of it in gold loans also.

Primarily in this areas. Also some general consumer related NBFCs.

I would not name the NBFCs, but there are a few. One thing is common: all of them are AAA-rated.

Congrats, Amitava. This is good set of results.

I'm going to focus less on this year, and I'm not looking this as a sort of guidance, but given where we are in terms of a cleaned up balance sheet, civilizing liabilities, looking at non-Jammu book. On a 3-year perspective, sir, what is the kind of growth, business growth that you want to target?

This is more aspirational rather than saying that I'm going to hold you to these numbers. Assuming that there are no macroeconomic setbacks, and it's not that you've got a very big book, what do you think you'd aspire to gun for?

Thank you, Nirav, for the kind words. If you look at our business levels is at around 2.9 lakh crore at the moment.

If you ask me, 3 years' time, it's not aspiration, our aim and what we have with us in the bank, we aim to cross 5 lakh crore by then. That is the first aim, of course depending on the environment and market situations.

In 3 years' time, we will definitely be crossing 5 lakh crore of business.

Excellent, and so that obviously means that we're looking at somewhere between 17-18% sort of growth rate in advances and all to get to those kind of numbers, which is obviously what you've been delivering, yeah. Definitely,

definitely.

Excellent. That is great to hear, given your ROEs and where you are, I think all the best to you, sir.

Thank you, sir. Thank you very much.

Hi, sir. Sonal this side again.

I think I missed asking third question. I just wanted to understand the credit cost guidance for next year.

The toughest question you have asked me. See, people have been asking me, "How long are you going to have a zero credit cost?"

I always say that I would like to continue with a zero credit cost as long as possible. I guess the credit cost will be somewhere around, say.1% or .2% maximum, not more than that.

Got it, sir. This is well below whatever the benchmarks are basically for the sectors you work in.

Yeah.

Which is good. All right, sir.

That's it from my side. Thank you.

Thank you. Thank you.

Thank you. The next question comes from the line of Pranay, who is an investor.

Please go ahead. Yes, sir.

Thank you once again for this opportunity. Sir, I just wanted to again ask about the credit cost, not from an immediate 12-month perspective, but given that, first of all, we sort of are in the Goldilocks scenario where slippages are very low, especially for a bank like ours where we don't have exposure to MFIs or credit cards or any significant unsecured loan exposure.

Our unsecured book is very different from that of other banks. Our slippage is still at .6%.7%, which is commendable.

From a 3-4-year lens, sir, I think it's safe to say that we should normalize a much higher credit cost than we've been achieving right now because of all the upgradations and reversals. How do we see that evolving in another 3-4 years, because our credit cost goes to our slippage ratio spot .5.6.7%, then our ROA, ROE metrics look different.

How do we see that when we cross that over a period of time?

See, if I have to do some analysis, then I'll have to look at my historical data. If I look at my historical data, I am unable to assess a credit cost which is more than 1% in the next 3 to 4 years.

And 1% is also a very, very upwardly optimistic or pessimistic figure, if you may say, because if I had seen some inherent weaknesses in my book, if I had loans in the book which also is say, susceptible to the business environment or the economic environment, more or less we are insulated on those, because of the portfolio that we have currently, and you are right on that. I don't see the credit cost being a factor to be discussed even in the next 2 to 3 years.

I don't believe so. On top of it, we have developed a very robust recovery mechanism, and we had added another initiative to that.

We have introduced the concept of zonal IRBs. Now, zonal IRBs are specialized outfits which cater only for recovery.

The setup that we have, the way we have been able to tackle the slippages and the NPAs and the recoveries, at least at the moment, I don't believe that credit cost will be a cause of concern for us.

Hi, sir. Thanks again for the opportunity.

I just had two clarifications on the margin and on the credit cost. While you have guided for 3.5% kind of margin against 3.6% this year, but I see that there are levers in terms of maturity of RIDF investments, etcetera, as well as some more scope in terms of deposit repricing, etcetera.

To that extent, don't you think 3.5% or a decline versus this year is a very conservative guidance, or how do you look at it?

Mona, I would be happy to give a guidance of 3.5% and end up at 4%.

Huh?

Right? Why I have given this guidance is based on what I have already said.

The income that had been generated in this bank in the last financial year and before that, not '25-26, '24-25 and '23-24, essentially came from the retail loans that we have in Jammu and Kashmir. Now that, because of last year's difficulties in this geography, we did not have that kind of an income.

That part, I believe, is going to continue for some time. The growth that we are going to have in the coming years, and you are right, the RIDFs being maturing, we have the low-cost investments which are going to be for us to invest further, the margins would be better, definitely better.

I am still not very sure as to when the returns from the retail advances will start to accrue. It might start accruing very soon.

I have already seen green shoots. Once that starts na, then maybe next quarter I will be able to revise my guidance on NIM.

Noted,

noted. That's very clear.

Secondly, on the credit cost bit, you mentioned of .1 to .2% kind of credit cost. Does that factor in the impact of ECL provisions as well that you'll be making over the next 5 years?

No, no, that doesn't factor in the impact of ECL. Got it,

got it. That's all from my side.

Thank you so much and all the best.

Thank you.

Thank you, sir, for the elaborated call that we had. Thanks all participants as well.

On behalf of Emkay and the management of Jammu and Kashmir, I thank all the participants for joining. Happy evening and have a good day.

Thank you.

Thank you. Thank you, Anand.

Thank you to all the participants. Thank you.