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J&K Bank reports Q2 net profit at Rs 111 cr

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Srinagar: Public sector lender Jammu & Kashmir Bank on Friday reported an over two-fold jump in net profit at Rs 111.09 crore in quarter ended September.

The bank had posted a net profit of Rs 43.93 crore in the year-ago period and a profit of Rs 104.32 crore in Q1 of FY22.

Total income of the bank rose to Rs 2,201.26 crore during the July-September period of 2021-22, as against Rs 2,194.47 crore in same period of 2020-21, Jammu & Kashmir Bank (J&K Bank) said in a regulatory filing.

Bank’s provisions for bad loans and contingencies for the reported quarter fell to Rs 192.68 crore, as against Rs 324.92 crore in same period a year ago.

Even as there was a slight rise in gross non-performing assets (NPA) ratio at 8.95 percent of the gross advances as of September 30, from 8.87 percent by end of September last year.

Net NPA was down at 3.02 percent against 3.03 percent.

Stock of J&K Bank closed at Rs 45.95 apiece on BSE, up 0.33 percent over previous close.

Meanwhile, an official press release here said J&K Bank’s half-yearly (H1) net profit for the current financial year (2021-22) jumped over four-times Year-on-Year (YoY) to Rs 215.41 crore when compared with Rs 50.43 crore recorded during the corresponding period of the last financial year.

For the September quarter (Q2), 2021, the Bank posted Rs 111.09 crore net profit registering 153 percent rise as compared to Rs 43.93 crore recorded for the corresponding quarter previous year.

During the reported quarter, J&K Bank’s net interest income (NII) rose by 3 percent YoY to Rs 973.14 crore as compared to Rs 942.61 crore recorded last year. Meanwhile, the net interest margin (NIM) for the quarter was at 3.65 crore, the press release said.

It said the announcement came after the Bank’s Board-of-Directors reviewed and approved the quarterly and half-yearly numbers during a meeting held here at the Bank’s Corporate Headquarters.

Attributing the improved bottom-line to the growing synergy between bank’s strategy, operations and supervision, Chairman & MD R K Chhibber expressed satisfaction over the results delivered by the bank.

“It’s a good result in given circumstances. We are poised for a long-term growth as the numbers clearly reflect the momentum steadily gaining across our performance indicators. With a stronger and healthier balance-sheet, we can foresee conditions obtaining favorably for realizing our short-term business objectives besides meeting the long-term challenges,” he said.

The bank’s cost of funds during the half-year came down significantly to 3.78 percent YoY from 4.31 percent recorded for the corresponding period of previous year. Over the course of last many quarters we have markedly brought down the cost of funds besides other expenses, improved recoveries and maintained the margins, asserted the CMD.

According to the press release, the bank’s asset-quality remained stable as net NPAs of the Bank as percentage to net Advances ratio stood at 3.02 percent while as the bank’s gross NPA ratio has improved by 74 basis points in sequential terms to 8.95 percent from 9.69 percent recorded for earlier quarter.

The Provision Coverage Ratio (PCR) of the bank increased by 117 basis points to 81.57 percent from 80.40 percent recorded last year, the release said.

“Every measure is put in place to improve the asset-quality and so far we have successfully maintained the quality of our loan book. We are also maintaining the NPA coverage ratio at over 80 percent,” commented the CMD.

The Bank’s Return on Assets (RoA) has risen sharply YoY from 0.16 percent to 0.38 percent while as the Return on Equity (RoE) has more than doubled YoY to 6.98 percent from 3.23 percent

Driven by the 11 percent YoY increase in the advances from J&K UT, the total net advances of the bank stood at Rs 68341.84 crore as on September 30, 2021 compared to Rs 66841.73 crore recorded last year. The total deposits rose by around 6 percent to Rs 106267.35 crore from Rs 100469.15 crore recorded during the corresponding quarter last year with CASA figure at 55.34 percent as against 53.32 percent recorded on September 30, 2020.

“We have maintained the double-digit growth of over 11 percent in advances in our core operational geography of J&K, which forms the major bulk of our business besides affording us a very strong deposit profile with one of the best industry-wide mix of CASA and Term Deposits that are mostly retail and thus stable,” said the CMD.

Notably, UT of J&K contributes 88 percent in terms of deposits and 72 percent in terms of advances to the bank’s overall business.

Regarding the bank’s capital position, the CMD asserted, “We have improved our capitalization largely and are now placed comfortably in terms of our capital position after the recent capital-infusion of Rs 500 crore by the promoter and majority stakeholder i.e. J&K Government and of Rs 150 crore capital through successful JKB ESPS 2021. With our core capital significantly improved to 11.04 percent our Capital Adequacy Ratio is at 12.80 percent, which is quite well above the regulatory norm, as against 11.86 percent recorded last year.”

According to the press release, expounding upon the envisioned growth path ahead, the CMD said that the UT government’s industrial package and flagship program of Mission Youth will be game-changers in reshaping the economic future of J&K. In this regard, the Bank has already launched many schemes like J&K Bank Mumkin Scheme for youth and J&K Bank Hausla scheme for women entrepreneurs.

“The government’s industrial development package of Rs 28400 crore has only begun to gain traction and will be in full swing very soon. And with things seemingly easing out on pandemic front, we expect a sharp up-tick in J&K economy resulting in substantial deployment of credit to productive segments of economy in coming quarters” adding that being an implementing agency for government’s Mission Youth Program to employ over three lakh youth; the Bank envisages itself both as the major contributor and beneficiary of the massive employment generation program.

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