Jana Small Finance Bank commenced its operations in March 2018, establishing itself as the fourth largest Small Finance Bank in India based on Assets Under Management (AUM) and deposit size as of March 31, 2023. Originally incorporated as Janalakshmi Financial Services Limited on July 24, 2006, it officially changed its name to Jana Small Finance Bank Limited in January 2018. The bank's registered and corporate office is located in Bengaluru, Karnataka, India.
As of September 30, 2023, Jana Small Finance Bank operates an extensive network of 771 banking outlets, including 278 in unbanked rural centers, spanning across 22 states and two union territories. The bank is a significant employer with approximately 22,000 personnel and caters to a vast customer base of 4.5 million active customers.
Jana Small Finance Bank structures its operations across four key segments: Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Operations. The Retail Banking segment is the primary contributor to the bank's revenue. Its core product offerings include a variety of deposits, such as demand deposits, savings accounts, and term deposits, alongside a diverse range of advances.
The bank offers secured loans, including micro loans against property, loans to Micro, Small, and Medium Enterprises (MSMEs), affordable housing loans, term loans to Non-Banking Finance Companies (NBFCs), loans against fixed deposits, two-wheeler loans, and gold loans. Additionally, Jana Small Finance Bank provides unsecured loans such as individual and micro business loans, agricultural and allied loans, and loans disbursed to women's groups following the joint liability group model. Complementary services include current and savings accounts, fixed and recurring deposits, insurance products (life, general, and health), card services, investment and payment solutions, and mobile, internet, and corporate internet banking facilities.
Jana Small Finance Bank has a strong focus on digital transformation, having implemented technology solutions for cashless loan disbursements and digitized collection mechanisms through mobile applications. In April 2020, the bank introduced 'DIGIGEN', an integrated, paperless, and digital process for account opening and KYC verification.
The bank supports standard digital payment services like NEFT, RTGS, IMPS, and e-NACH/NACH. It also offers a UPI QR code-based EMI payment service, underscoring its commitment to a digital-first approach that serves both urban and rural markets effectively.
- H1 FY25: The bank reported a Profit After Tax (PAT) of ₹267 crore, an increase of 25% year-on-year from ₹213 crore in H1 FY24. The cost-to-income ratio stood at 58.3%, Return on Assets (ROA) at 1.6%, and Return on Equity (ROE) at 14.5%.
- Q1 FY25: PAT reached ₹171 crore, a significant 89% year-on-year growth from ₹90 crore in Q1 FY24. The cost-to-income ratio was 55.5%, ROA was 2.1%, and ROE was 18.8%.
- As of H1 FY25:
- Gross Non-Performing Assets (NPA): 2.86%
- Net NPA: 0.95%
- Provision Coverage Ratio (PCR): 67.3%
- Capital Adequacy Ratio (CRAR): 20.3%
- Tier-1 CRAR: 19.3%
- Q2 FY25 Performance Note: While interest earned grew by 25.17% year-on-year, Profit Before Tax (PBT) and PAT declined. NPA levels also reached their highest in the last five quarters during this period, indicating mixed performance.
- H1 FY25:
- CASA (Current Account, Savings Account) growth: 28% year-on-year.
- Secured asset growth: 29% year-on-year.
- Unsecured asset growth: 1% year-on-year.
- Q1 FY25:
- Loan assets under management: ₹25,759 crore (25% year-on-year growth).
- Total deposits: ₹23,710 crore (41% year-on-year growth).
Jana Small Finance Bank is positioned among the top four Small Finance Banks in India based on AUM and deposit size. It boasts the second most geographically diversified portfolio and a pan-India presence. Key competitors in this space include Equitas Small Finance Bank, Ujjivan Small Finance Bank, ESAF Small Finance Bank, and AU Small Finance Bank.
The bank's market capitalization has been in the range of approximately ₹5,195-5,206 crore, though it has experienced volatility. The 52-week high for the share price was ₹760.90, and the 52-week low was ₹363.80.
In February 2024, Jana Small Finance Bank successfully completed its Initial Public Offering (IPO). The IPO consisted of 13,768,049 equity shares, raising ₹570 crore. This comprised a fresh issue of ₹462 crore and an Offer for Sale (OFS) of ₹108 crore. Jana Holdings Ltd is the promoter, holding approximately a 25% stake in the company.
The bank's management is focused on serving "aspirational India" across 24 states, aiming to become an anchor bank for its customers. However, the bank has encountered elevated delinquency in its Microfinance Institution (MFI) business, leading to higher Gross NPAs and degrowth in that specific segment.
Jana Small Finance Bank's recent financial performance presents a mixed picture. While there are positive indicators in deposit and secured asset growth, challenges in asset quality within the microfinance segment require close monitoring. Investors are advised to stay informed about the bank's performance in the coming quarters. The strategic focus remains on expanding secured assets and deposits while actively managing asset quality concerns in the microfinance portfolio.
