SRINAGAR: Jammu and Kashmir Bank has delivered an impressive performance in Q1, witnessing ninety seven percent Year-on-Year jump in net profit, nearly doubling its profit-after-tax (PAT) to Rs 326.45 Cr for the first quarter of FY 2023-24 compared to Rs 165.97 Cr reported in the same period last financial year.
The Bank unveiled its Q1 results today, following approval by the Board of Directors during a meeting at the Bank’s Corporate Headquarters.
Highlights of the Bank’s performance include a 24 percent YoY rise in Net Interest Income (NII) to Rs 1283.30 Cr in the first quarter of the current fiscal year. The Net Interest Margin (NIM) also improved to 3.98 percent, up from 3.46 percent in Q1 of FY 2023 and 3.94 percent in the previous quarter of FY 2023.
The core operating profit of the Bank saw a significant spike of 38 percent YoY, reaching Rs 528.05 Cr from Rs 381.45 Cr. Additionally, the Bank’s operating income rose by 22 percent YoY and 7 percent QoQ, resulting in a reduced Cost to Income Ratio of 65.07 percent for the quarter, compared to 69.17 percent in Q1 of the last fiscal year. The Bank’s Return on Assets (RoA) for the June quarter stood at 0.94 percent.
Commenting on the results, MD & CEO Baldev Prakash “With an almost doubled Year-on-Year PAT, our Q1 performance gives us a very encouraging start to meet our annual guidance.Reflecting the gradual but marked improvement in our operations, our core operating profit has jumped 38 percent YoY while witnessing 17 percent rise on QoQ basis.With NIM at almost 4 percent along with 24 percent YoY increase in Net Interest Income, I see promising top-line growth unfolding in coming quarters.”
Baldev Prakash also emphasised the Bank’s continued efforts to strengthen and stabilize operational parameters, ensuring continuous and sustainable growth in the future.
In terms of asset quality, the Bank’s gross non-performing assets (GNPA) decreased to 5.77 percent YoY from 9.09 percent recorded in the previous year. The net NPA for Q1 also improved to 1.39 percent, compared to 3.02 percent in Q1 of the last financial year. The NPA Coverage Ratio for Q1 improved to 87.55 percent, reflecting a positive trend in asset quality.
Regarding asset quality, Baldev Prakash expressed satisfaction with the encouraging trend and affirmed the Bank’s commitment to achieving the asset-quality guidance of containing GNPA figures between 4 percent and 4.5 percent by the end of the current fiscal year.
On business growth, Jammu and Kashmir Bank’s advances grew by over 17 percent YoY, amounting to Rs 84475.63 Cr in Q1, compared to Rs 71926.56 Cr in the corresponding quarter of the previous year. Deposits also increased by 8 percent to Rs 121297.49 Cr, compared to Rs 112145.18 Cr in the previous year.
While advances and deposits’ growth in the UT of J&K were at 11 percent and 8 percent respectively, in the rest of India, deposits increased by 11 percent and advances grew by 26 percent. The Bank’s CASA Ratio remained well above 53 percent during the quarter.
Addressing the business numbers, Baldev Prakash expressed satisfaction with the healthy growth in advances and outlined strategies to maintain the growth momentum. Despite a slight de-growth on the liability side on a QoQ basis, the Bank initiated aggressive deposit campaigns, targeting mobilization of CASA through digital on boarding of new-to-business customers.
The Bank’s Capital Adequacy Ratio (CRAR) stood at 14.83 percent as of the current reporting period, compared to 13.02 percent in the previous year. Baldev Prakash shared plans to achieve a CRAR of about 16 percent by the end of the fiscal year, with potential internal accruals and the possibility of raising capital from the market if required. The Bank already has an enabling board approval for raising capital toward the end of the current fiscal year (Q3/Q4).