SRINAGAR: Jammu and Kashmir Bank’s net profit rose by 56.5 percent Year-on-Year (YoY) to Rs 381.07 crore in the September Quarter (Q2) of the current financial year (CFY), compared to Rs 243.49 crore recorded for the corresponding quarter in the previous year.
The net profit for the half-year (H1) jumped by 73 percent to Rs 707.52 crore from Rs 409.46 crore recorded for H1 in the last financial year.
The bank announced its financial numbers after its Board of Directors reviewed and approved the quarterly and half-yearly figures during a meeting at the bank’s Delhi office.
The bank’s Net Interest Income (NII) increased by 11 percent YoY to Rs 1333.83 crore for the September quarter and 17 percent for the H1 to Rs 2617.13 crore compared to the corresponding periods of the previous year.
Operating Profit rose by 23 percent YoY for the reviewed half-year of CFY. The bank’s Net Interest Margin (NIM) improved to 4.07 percent from 4.04 percent in the corresponding quarter last year.
Return on Assets significantly improved to 1.08 percent from 0.71 percent in the previous year. Other income witnessed a 31 percent YoY increase to Rs 190.31 crore for the September quarter.
Commenting on the bank’s growth numbers, MD & CEO Baldev Prakash said, “With September quarter earnings signifying our remarkable and steady progress, we are pleased to see that our growth story continues and we are on track to meet our annual guidance numbers. Along with steady growth in Net Interest Income and profitability, both YoY and QoQ, we have maintained our NIM at over 4 percent despite a dip in our CASA figure, which is currently an industry-wide trend.”
“Having met our short-term targets, I see a greater organizational momentum unfolding in the second half of FY 2023-24 to achieve our annual goals,” he added.
The bank’s Gross NPA Ratio decreased by 51 basis points QoQ to 5.26 percent from 5.77 percent. The Net NPA ratio moderated by over 35 basis points in sequential terms to 1.04 percent from 1.39 percent in the last quarter.
Provision Coverage Ratio (PCR) of the bank improved by 441 basis points to 89.99 percent from 85.58 percent a year ago.
Satisfied with the bank’s asset quality, MD & CEO said, “Due to sustained and comprehensive institutional focus on our loan book, our asset quality has vastly improved in the last two years. With a very low slippage ratio of 1.25 percent (annualized) during the half-year, resulting in a credit cost of only 0.11 percent, I feel confident that by the end of the current fiscal year, we will achieve the envisaged target of 4.5 percent Gross NPA. With net NPAs already coming down to around 1 percent, we are also on track to realize our target of 1 percent Return on Assets post-tax by the end of the current financial year.”
“Going forward, we expect a substantial increase in the other income segment as there are numerous settlements and technical write-offs likely to materialize in the second half of CFY, resulting in the write-back of provisions,” he added.
Deposits and Advances of the bank grew by 9 percent and 18 percent YoY to Rs 126589.73 crore and Rs 87817.84 crore, respectively.
The bank’s Yield on Advances significantly improved to 9.50 percent for the quarter from 9.01 percent recorded last year, while CASA fell to over 50 percent, which still ranks among the highest in the industry.
Regarding business growth, MD said, “While witnessing growth in both advances and deposits, we are on track to achieve our top-line growth numbers as envisaged in our business plan. Our advances have registered a growth of 18 percent, while our deposits have increased by 9 percent. Although, in line with the market trend, our CASA figure has reduced due to interest differential between savings and term deposits, which usually results in a shift towards the latter, including internal cannibalization. However, we have already initiated measures on the ground to mobilize deposits.”
“Besides employing the latest technology platforms to roll out self-serviced online account opening facility for customers to ensure an easier and faster way to open accounts with us, we are conducting full QR-Code coverage and POS installation campaigns across our areas of operations to reinforce the efforts of staff for mobilization of deposits,” he added.
The bank’s Capital Adequacy Ratio stood at 14.53 percent, as against 12.86 percent recorded last year. In his remarks on the capital position, the MD & CEO said, “While being adequately cushioned in terms of our capital position, we are also on track to achieve our annual guidance of CRAR at 16 percent by the end of CFY. Importantly, CRAR of 14.53 percent is exclusive of Rs 338 crore (ESPS) and half-yearly profit of Rs 707 crore, which would result in an additional 128 basis points.”
On the occasion, MD & CEO emphasised the prioritization of digital transformation, saying, “On the digital front, we have made important gains in terms of extending convenience, security, and satisfaction to our customers. From loan processing through STP platform, which facilitates the disbursal of personal loans to our customers in just 10 seconds, to mPay Delight + that gives a ‘Bank in Pocket’ feel to our customers and the recently rolled out online account-opening facility through Video-enabled KYC – the idea is to ensure ease and safety of banking for our clients across geographies.”
“Various other products are on the anvil, and we expect their rollout by the end of CFY, enabling many more services of the bank to go digital, including STP Loan facility for all personal products, including housing, car finance, besides business loans for MSME and other segments,” he added.
