Jana SFB Q3 FY26: Slippage Decline, NIM Improvement, and Growth Resumption
Jana Small Finance Bank (JSFB) reported improved Q3 FY26 results with declining slippages and rising NIMs. Disbursals hit an 18-month high. Deposits grew 30% YoY. For FY27, ROE is projected at 14-15%, ROA at 1.5-1.6%, and NIMs at 7-7.1%. Credit costs are expected to decrease significantly.
The positive financial results, improved asset quality indicators, and optimistic future guidance on profitability and growth are material to investors and stakeholders, likely influencing stock valuation and investor confidence.
The announcement details a significant turnaround in the bank's performance, with improvements in key metrics like slippages, NIMs, and disbursals, along with positive future guidance, indicating a strong recovery and growth outlook.
Jana Small Finance Bank Limited (JSFB) has reported a significant improvement in its performance for the quarter ended December 31, 2025 (Q3 FY26), with key metrics showing a positive trend after a challenging period. The bank has seen a decisive drop in slippages and Special Mention Account (SMA) trends, which had peaked in the first quarter of the fiscal year. Management anticipates these trends to continue and be lower than March 2024 levels by March 2026.
The bank achieved its highest disbursals in both secured and unsecured segments in 18 months during Q3 FY26. Net Interest Margins (NIMs) have shown a modest growth of 10 basis points, with further improvement expected in Q4 FY26 due to the growth in the unsecured business and declining cost of funds. The bank has also increased its outstanding under the guarantee program to 62% of its MFI book, with meaningful claims expected from next year.
JSFB's deposit book continues to grow robustly at 30% year-on-year, while the cost of funds has declined. The bank is in the process of updating and resubmitting its application for a Universal Bank license to the RBI.
Looking ahead, JSFB projects its credit cost for Q4 FY26 to be between ₹170 crore and ₹190 crore, marking the lowest for the year. Gross NPAs are expected to remain flat between ₹830 crore and ₹850 crore. The SMA book is projected to decrease to 4% by the end of the fiscal year, with the unsecured SMA expected at 3.8% and secured SMA at 4%.
The bank has provided guidance for the next financial year, expecting Return on Equity (ROE) between 14% to 15%, Return on Assets (ROA) between 1.5% to 1.6%, and NIMs around 7% to 7.1%. The cost-to-income ratio is expected to normalize to 60%-62% by Q2 or Q3 of the next financial year.
In terms of strategic initiatives, the bank is focusing on its core strategy of maintaining an 80% secured and 20% unsecured asset mix, with the unsecured portion increasingly covered under the guarantee program. The bank has also seen strong growth in its CASA ratio, now at 20%, and a reduction in the cost of deposits to 7.7%, with further decline to 7.5% anticipated.
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Jana Small Finance Bank Limited filed this with the NSE as a statutory disclosure, categorised under other results related. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Jana Small Finance Bank Limited. Read the original for the full detail.