Jana Small Finance Bank reports improved performance in Q3 FY26, including a reduction in slippages and a positive NIM trend for the first time since Q1 FY25. The bank’s unsecured book under the guarantee program now covers 62% of outstanding amounts, with claims expected next year. Deposit growth stands at 30% YOY. Application to operate as Universal Bank still pending updates.
Key Highlights for Q3 FY26
Jana Small Finance Bank saw notable improvements in several key areas during the third quarter of fiscal year 2026:
- Reduction in slippages and SMA trend, peaking in Q1 FY26.
- Slippages and SMA in March 2026 are expected to be lower than in March 2024.
- Highest disbursal for both secured and unsecured loans since Q1 FY25.
- Improvement in NIM for the first time since Q1 FY25, with a modest increase of 10 bps. The positive trend is expected to continue.
- The unsecured loan portfolio covered under the guarantee program exceeds 62%.
- Deposit book shows a 30% YOY growth with a reduction in deposit costs.
Financial Performance Challenges
Despite overall positive momentum, the bank faced challenges that impacted its financials:
- Slow growth in the unsecured loan book led to NIM compression of approximately 20 bps, resulting in a (₹66) crore impact.
- Faster growth in the secured loan book increased acquisition costs, leading to a (₹14) crore impact.
- Increased collection payroll and recovery costs amounted to (₹40) crore.
- Changes in labor codes resulted in a (₹12) crore impact.
- Credit costs due to NPA slippages had a (₹110) crore impact.
These factors resulted in a total net impact of (₹242) crore on the bank’s financials for the 9-month period.
Asset Quality and Credit Costs
The bank is focused on improving asset quality with a downward trend in slippages:
- Credit Cost for Q3 FY26 was ₹277 crore with estimates for Q4 FY26 ranging from ₹170-190 crore.
- Closing GNPA Balance for Q3 FY26 stood at ₹829 crore.
- GNPA ratio at 2.49%, with projections between 2.40% – 2.50% for Q4 FY26.
- NNPA ratio at 0.90%, with projections between 0.80%- 0.85% for Q4 FY26.
- PCR at 64.44%.
Growth in Deposits and Advances
- YTD CASA grew by 29%.
- YTD growth in Term Deposits of 13%.
- Total Deposits reached ₹33,733 crore, showing a YTD growth of 16%.
- Cost of Deposits for Q3 was 7.7%.
- Secured Book stands at 72.8%.
Key Financial Expectations
The bank projects the following expectations:
- Profit Before Tax (PBT) ranging from ₹140-160 crore for Q4 FY26.
- RoA around ~1.5%.
- ROE around ~15%.
Source: BSE
