Jammu and Kashmir Bank Ltd

Esteemed Shareholders,

I hope this message finds you in the best of health and spirits. It gives me great pleasure to present to you the 87^th Annual Report of Jammu & Kashmir Bank Limited for the financial year 2024-25, which is another landmark year for the Bank. As this is my first address in the Annual Report since assuming the role of MD & CEO of this esteemed institution, I take this opportunity to reflect on the Bank's performance, the prevailing economic landscape, and our strategic direction for the future. I am committed to carrying forward the rich legacy of this institution with a renewed sense of purpose. I would also like to extend my sincere gratitude to all our shareholders for their belief and confidence in this Bank, which has been instrumental in Bank's journey of success. The Bank continues to be fundamentally strong and evolve consistently - towards enhanced efficiency and deeper digital integration with a sharp customer focus. The strong foundations that have been built are now translating into consistent performances and we are well-poised to sustain this momentum in the days to come.

The global economy is currently facing considerable uncertainty and headwinds due to ongoing geopolitical tensions, fluctuating commodity prices, shifting trade dynamics, and disrupted capital flows. These challenges are likely to weigh on global GDP, which may see a moderation in growth in 2025. Despite this uncertain environment, the Indian economy continues to demonstrate resilience.

India's economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. As per latest NSO estimates, real GDP growth of the country stood at 6.5% for FY2025, underpinned by continued public investment and structural reforms. As per RBI, this momentum is expected to continue in FY2026 with similar projections, supported by consumption, capital spending, and a benign inflation outlook. The sustained performance is being driven by vibrant domestic demand, infrastructure investments, increased consumer spending and digital transformation. Improved fiscal metrics and k robust policy support from the Reserve Bank of India have contributed to a resilient economic trajectory.

1 Inflation has moderated to less than 3%, offering relief 9 to both businesses and households. In June 2025, the year- on-year inflation rate based on the Consumer Price Index (CPI) stood at 2.10 per cent. This marks the lowest year-on- year inflation after January 2019. It also reflects a drop of 72 basis points from the previous month.

Our home territories of Jammu & Kashmir and Ladakh have also witnessed renewed activity supported by large- scale infrastructure investments, increased tourist influx, and rising investments in critical sectors including horticulture, handicrafts, renewable energy, and logistics. The region's Gross State Domestic Product (GSDP) has shown meaningful growth, aided by higher public expenditure and private participation. Employment generation, industrial promotion, tourism, and digital initiatives have begun to yield tangible outcomes. Although there has been some disruption following a terrible terror incident where innocent lives of our countrymen were lost. But, I feel that the worst is over as the tourism sector is regaining its pace slowly and steadily. Your Bank remains committed to facilitating the developmental transformation of this region by offering financial solutions tailored to local needs.

The financial system remains stable with the banking sector continuing its growth momentum with improved credit offtake, better asset quality, and increased capital buffers. Widespread adoption of digital banking, enhanced governance standards, and regulatory focus on cyber security have also contributed to a stronger banking ecosystem.

Our Bank has delivered another year of consistent and sustainable performance in FY2024-25. We stayed true to our ethos of trust, customer service, and socio-economic development.

The Bank recorded a hat-trick of lifetime high annual profits posting its highest ever annual net profit of Rs.2082 Crores, reflecting an 18% year-on-year growth. Total business surpassed Rs.2.5 Lakh Crores with deposits of 1.49 Lakh Crore and gross advances of 1.07 Lakh Crore. Both Deposits and Net advances registered a double-digit growth of 10.2% and 11.1% respectively. Net Interest Margin remained stable at 3.92%, while the Cost-to-Income Ratio declined significantly by 451 basis points to 57.73% and Return on Assets improved to 1.32%.

Asset quality metrics also improved with Gross NPA ratio reducing to 3.37% and Net NPA remaining at 0.79%, indicating improved underwriting standards and recovery efforts. CRAR of the Bank stood at a healthy 16.29%, with CET I capital at 12.95%, reflecting a strong standing and adequate buffers.

Digital transformation continues to be a key area of focus. Enhancements were made to mPay and Net Banking platforms and end-to-end digital loan journeys were rolled out for retail customers. We deepened our outreach with 15 new branches, 21 ATMs/CRMs, and an expanded BC network of around 1940.

During the FY2024-25, our Bank has continued undertaking strategic initiatives to achieve various business milestones for realizing long-term goals. Some of the important strategic initiatives undertaken by our Bank are:

To further strengthen the capabilities offered by latest technology under lending, entire lending value chain has been developed for end-to-end digital solutions for customer on-boarding, application processing, underwriting, sanction & disbursement. Straight through processing journeys for personal loans give us an edge in marketplace by reducing TAT and improving customer experience.

Streamlining credit dispensation of retail loans through automation and centralization remains the top priority of the Bank. All flagship retail schemes viz. Car loan, Housing Loan, Education Loan, LAP etc. have been rolled out on the RLOS platform through retail CPCs. In the near future, under short-term plan, Bank envisions to roll-out Agri, MSME and Corporate Loans on LOS platform which shall bring uniformity and standardization in loan appraisal and underwriting across the Bank.

The Bank has embraced open-banking and API gateway initiative which reinforces our commitment to digital excellence and customer-centric innovation. This strategic milestone allows secure integration with trusted FinTech partners which enable seamless ERP integration, automated payment processing, real-time cash flow visibility, and instant reconciliation-driving smarter financial management for our corporate customers.

The Bank has also installed interactive signage kiosks to promote communication and customer engagement. In addition to displaying video content and information about various products and service of the Bank, interactive content has been made available for self-service of customers for services like Bill payments, Internet Banking, Products & Services, dispute resolution for digital transactions, loyalty rewards etc.

To enable prompt and quick digital payment reconciliation, the Bank has rolled out advanced reconciliation solution for end-to-end digital transaction reconciliation life-cycle. This advanced platform helps the Bank in maximizing automation and reducing manual effort in the process of reconciliation of all digital channels.

The Bank has also implemented digital Insurance solution which enables our existing customers as well as prospective customers to buy Insurance products from our insurance partners digitally ensuring convenience and efficiency.

The Bank has also revamped its website to enhance the digital presence of the Bank. The redesigned website aligns with the Banks' corporate theme, providing an attractive, user- friendly, and easy-to-navigate platform to showcase the bank's products and services for current and prospective clients.

Our goal is to be the 'Bank of Choice,' delivering unparalleled value to customers, employees, and stakeholders. Looking ahead, FY 2026 will be a year of transformation. Our focus will be on expanding quality credit, enhancing digital capabilities, elevating customer service, promoting financial inclusion, and developing future-ready human capital.

On the technology front, Bank is making substantial investments in IT infrastructure and capabilities to accelerate digital transformation and keep pace with industry advancements in order to deliver superior and seamless services to our customers

With over 4500+ touch-points, we are committed to delivering a superior, unified experience across all channels. Investment in CRM solutions, digital on-boarding, customized journeys, leveraging data analytics and product innovation will drive customer satisfaction and retention.

Developing human capital remains a strategic priority. A skilled workforce is key to success and executing our growth plans. Bank shall continue to invest in its human resources for their up-skilling and competence building.

We reaffirm our commitment to financial inclusion, reaching the underserved through Business Correspondents and Brick and Mortar banking outlets. Our approach is to ensure access to essential financial services across the last mile.

None of these achievements would have been possible without the unwavering support of our stakeholders. I extend my heartfelt gratitude to our valued customers for their continued trust, to our shareholders for their support and belief, to our Board of Directors for their strategic guidance, and to our employees for their dedication and hard work.

I extend my gratitude to the Reserve Bank of India, Government of India, Government of Jammu & Kashmir, Government of Ladakh and other regulatory institutions for their continued cooperation and direction.

We are on the cusp of a promising new chapter. With strategic clarity, robust fundamentals, and a passionate team, J&K Bank is well-positioned to deliver sustainable and inclusive growth. Let us continue to work together with determination and purpose to build a stronger, future-ready institution.

Warm regards,

(Managing Director & CEO).