KL Desk
Srinagar
J&K Bank has been accredited with Long-Term Issuer rating of ‘IND AA’ with a stable outlook by globally renowned Fitch Group Company.
Mumbai based India Ratings & Research- A Fitch Group Company – recently affirmed the Bank’s rating of ‘IND AA’, which denotes a very strong credit rating.
The agency considers the bank’s central role in sustaining the economy of the politically important state of Jammu and Kashmir (J&K), its dominant position in the banking business in J&K (around 70% share in lending and deposits) and its role as the agent of the RBI for conducting the general government business of the state government.
The agency in its report observes that J&K Bank’s profitability is robust, supported by its strong deposit franchise in theJ&K state, a low operating cost structure and benign credit costs. Asset quality has remained stable, with a gross non-performing loan (NPL) ratio of 1.54% at end-FY12 with system average at 2.94%. The bank’s strong market knowledge in J&K and relatively cautious lending policies outside its home state, have supported the Bank’s asset quality.
Liquidity profile is strong, given the high proportion of retail deposits in its funding mix (over 65%), which should enable it to limit its refinancing risk. Also, there are no cumulative short-term (up to one year) mismatches in its structural asset liability statements as of end-September 2012, the report adds.
