SRINAGAR: The Jammu and Kashmir Bank has reported a net profit of Rs 44 crore in the second quarter of fiscal 2020-21. This has taken the bank’s half-year profit to Rs 50 Cr.
This indicates the beginning of a turnaround in the bank that got a clean slate after bleeding a lot. It had posted a net loss of Rs 916.81 crore for the same quarter last fiscal.
Soon, it started booking profit. The Q1 profit for the current fiscal was Rs Rs 6.50 crore.
Bank’s total income fell to Rs 2,194.47 crore in July-September from Rs 2,262.94 crore in the same quarter of 2019-20, J&K Bank has said in a regulatory filing.
It said its asset quality has improved as gross non-performing assets (NPAs) fell to 8.87 per cent of the gross advances at the end of September 2020 from 10.64 per cent at the end of September 2019. In absolute terms, gross NPAs stood at Rs 6,317.09 crore as against Rs 7,473.29 crore a year ago.
Similarly, net NPAs declined to 3.03 per cent (Rs 2,023.32 crore) from 4.48 per cent (Rs 2,942.04 crore) a year ago.
On a consolidated basis, the bank posted a net profit of Rs 44.39 crore during the quarter under review. It had reported a net loss of Rs 918 crore in the year-ago quarter and a net profit of Rs 7.30 crore in the preceding quarter ended June of this fiscal.
Total consolidated income fell to Rs 2,197.24 crore during the quarter from Rs 2,263.66 crore in the year-ago period.
Meanwhile, the bank has taken Dr M Isaq Wani, former DG Accounts and Treasuries as Additional Director on the Board of Directors.
Commenting upon the financial results of the bank, Chairman and MD Rajesh Kumar Chhibber has reportedly said, “Despite difficulties, we have come out with promising numbers. These Q2 results certainly reflect the trend of turn-around that J&K Bank has scripted on YoY basis.”
“With improving financial indicators, posting net profit of Rs 43.93 Cr after the quarterly loss of Rs 916.82 Cr last September is quite encouraging for us as we move ahead on the envisaged trajectory of growth towards institutional excellence.”
Meanwhile, the bank’s cost of deposits during the quarter has improved to 4.20 % from 5.11 % recorded for the corresponding quarter of the previous year. The advances in J&K UT that form 67 % of the bank’s total advances registered a growth of 15 % while as the total net advances of the bank stood at Rs 66813.87 Cr as on September 30, 2020. The total deposits rose by around 10 % to Rs 100469 Cr from Rs 91620 Cr recorded during the corresponding quarter last year with CASA figure at 53.32 % as against 50.61 % recorded on September 30, 2020. Notably, 88 % of the bank’s total deposits are from J&K UT alone.
Chairman has thanked the administration for support. “The package is well thought-out; comprehensive in its conception and swift in implementation. We have already received the first tranche of the package in the form of Rs 250 Cr as interest subvention, which have been passed on to the eligible beneficiaries’ accounts including all of the restructured accounts of 2014 and 2016. The rest of the relief amount under the package will also be passed on to the eligible beneficiaries very soon”, he was quoted saying.
“Following the regulatory directions”, he added, “the bank has also made the ex-gratia payment of around Rs 21.53 Cr – as the difference between compound interest and simple interest for six months – to 673505 eligible borrowers well before the deadline provided by the regulator.”
Giving an overview of the bank’s performance vis-a-vis central Government’s Guaranteed Emergency Credit Line (GECL) Scheme under Atmanirbhar Bharat Abhiyaan, the CMD said, “GECL scheme has played a very significant role in providing much-needed liquidity succour to trigger the revival of businesses in J&K, Ladakh and rest of the country. So far, the bank has sanctioned Rs 1747 Cr to 47576 borrowers under the scheme, out of which Rs 1709 Cr stand disbursed.”
The bank has restructured 28 accounts for an amount of Rs 35.74 crore as of September 2020 under the “relief for MSME borrowers exempted or registered under the Goods and Services Tax”.
For select borrower accounts covered under the provisions of Insolvency and Bankruptcy Code (IBC), against a total outstanding of Rs 3,932.23 crore, the bank had made provision of Rs 3,666.06 crore, it added.
With regard to moratorium provisions between March-August due to the pandemic, the lender said it made provision of Rs 295 crore at the end of September 2020.
On the accounts not declared NPA, the lender said it made provision of Rs 89.07 crore.
“As per the Government of India scheme, the difference between compound interest and simple interest to eligible borrowers from March 1, 2020, to August 8, 2020, amounting to Rs 21.53 crore has been credited to their respective account by November 5, 2020,” J&K Bank said.
Besides, the lender said that in as many as three accounts, involving amounts of Rs 368.71 crore, the resolution period has been extended for the half-year ended September 2020.