Jyoti Bikas Bank Limited (JBBL) Struggles in Q4 with Sharp Drop in Profitability

Jyoti Bikas Bank Limited (JBBL) has published its audited Q4 results for FY 2024/25, revealing significant revenue pressure and a dramatic collapse in profitability despite maintaining stable margins and capital adequacy.

The bank reported total revenue of Rs. 5.73 billion, down 29.24% year-over-year from Rs. 7.79 billion in Q4 2023/24. Revenues have been under strain throughout the year, with consistent quarter-on-quarter declines since Q1.

Gross profit stood at Rs. 2.09 billion, yielding a margin of 36.54%, slightly stronger than last year’s 30.38%, suggesting cost management improvements. However, net income slumped to just Rs. 12.38 million, compared to Rs. 246.50 million in Q4 2023/24, translating to a razor-thin net margin of 0.22%.

For shareholders, EPS (annualized) collapsed to Rs. 0.28, down sharply from Rs. 5.61 last year. The PE ratio skyrocketed to 1,248.34, reflecting highly stretched valuations relative to earnings. Book Value per Share remained steady at Rs. 148.84, while the market price per share closed at Rs. 351.54, up from Rs. 314.00 last year, showing that investor sentiment has remained relatively optimistic despite weak fundamentals.

Financial Sector Indicators

• Capital Fund to RWA was 13.61%, slightly up from 12.39% last year, maintaining regulatory compliance.

• NPL Ratio surged to 7.98%, compared to 4.95% last year, highlighting deteriorating loan quality.

• Loan Loss Provision coverage dropped to 100.92%, from 108.91% a year ago, just barely covering bad loans.

• Cost of Funds fell to 4.99%, from 6.90% last year, easing financial pressures.

• Credit-to-Deposit Ratio was 83.23%, broadly stable compared to 78.69% last year.

• Base Rate declined to 7.12%, from 9.41% a year earlier, making loans cheaper.

• Net Interest Spread narrowed to 3.96%, compared to 4.55% last year, indicating tighter profitability on lending.

• Net Liquid Asset was 26.55%, broadly stable, ensuring liquidity buffer.