According to reports from The Financial Express, two regional private banks are trading below book value with strong profitability metrics. Karnataka Bank trades at 0.9 times book value, above its five-year P/BV of 0.6 times but below the peer median of 1.3 times. The bank reports a Return on Equity (RoE) of 10.4% and Return on Capital Employed (RoCE) of 6.1%. Jammu & Kashmir Bank also trades at 0.9 times book value, above its five-year P/BV of 0.8 times but below the peer median of 1.3 times. The bank demonstrates a RoE of 15.4% and RoCE of 5.8%. Both banks show double-digit RoE despite trading at discounted valuations to peers, with the valuation gap reflecting execution risks rather than fundamental weakness.
As reported by The Financial Express, Karnataka Bank has outlined ambitious expansion plans for FY27, expecting advances growth of 15-20% and deposit growth of 10-15%. The bank plans to open 31-32 branches during the year, with one already opened and 12-13 more expected before the end of the first half. The bank launched three MSME products with two more under development, along with digital gold loans, secured credit cards, and a new treasury platform. In Q1FY27, the bank reported net interest income growth of 24% to ₹938.3 crore and profit after tax growth of 43% to ₹418.95 crore. Net interest margin improved to 3.2% from 2.8% year-on-year, supported by lower funding costs and better-yielding loans. Retail, agriculture and MSME loans grew 12%, with housing, gold, vehicle and MSME loans contributing around ₹1,980 crore to sequential growth. The bank also reduced its low-yield inter-bank participation certificate portfolio by ₹243 crore.
According to The Financial Express, J&K Bank crossed ₹3 lakh crore in total business during Q1FY27, with advances growing 25% year-on-year to ₹1.31 lakh crore and deposits increasing 17% to ₹1.73 lakh crore. The bank's geographic expansion strategy shows rest of India operations contributing 26% of business, up from less than 20% a year earlier. Management expects overall credit growth of 18-20% in FY27 and plans to add 15-20 branches annually in Jammu and Kashmir and 50-70 new branches across the rest of India over the next two years. The bank has approved a ₹1,250 crore capital raise with management considering a larger issue, though further approvals are awaited. Notably, Mukul Agarwal acquired a 1.3% stake in J&K Bank during the June 2025 quarter, indicating increased investor interest.
As reported by The Financial Express, both banks have shown improvement in asset quality metrics. Karnataka Bank's gross NPA ratio fell to 2.58% from 3.46% year-on-year, while net NPA ratio declined to 0.87% from 1.44%. The bank's credit cost remained low at 0.03%. J&K Bank's gross NPA declined to 2.37% with net NPAs at 0.60% and provision coverage ratio remaining above 90%. In the past year, Karnataka Bank's share price surged 90.7%, while J&K Bank's share price increased 45.1%. The valuation gap reflects execution risks rather than fundamental weakness, with both banks requiring sustained performance to justify higher valuations. Karnataka Bank's aggregate business reached a record ₹1.97 lakh crore in the June 2026 quarter, up 11% year-on-year, demonstrating continued growth momentum.
