J&K Bank more than doubles yearly profit to Rs 465 Crore

J&K Bank, the state-owned premier financial institution, reported Rs 456 crore net profits for the financial year 2018-19, which is 129 percent higher as compared to last fiscal’s Rs 202 crore.

For the March quarter, bank reported a profit of 214.8 croreas compared to Rs 28.41 crore in the corresponding quarter of FY 2017-18.Buoyed by strong retail credit growth, sale of partial stake in PNB MetLife andresolution of some large NPLs the total income of the bank rose to Rs 8487crore in the FY 2018-19 as compared to Rs 7116 crore a year ago.

   

The results for the FY 2018-19 and Q4 FY 18-19 wereannounced by the Bank on Wednesday after Board of Directors of the Bank adoptedthe audited numbers of the Bank in its meeting held at Bank’s CorporateHeadquarters Srinagar. The growth in J&K state credit has been reported at23% over the last year and net interest income the difference between interestearned on loans and that paid on deposits grew by 42% in the 4th quarter of thefinancial year 2018-19.The NIIM of the bank which is an indicator ofprofitability was calculated at 4.05 for the 4th quarter and on full year basisit improved to 3.84% as compared to 3.65% in the previous fiscal.

The Chairman & CEO J&K Bank while acknowledging thesupport and guidance of the Board of Directors in navigating the bank inchallenging times attributed the turnaround & stellar growth in the top andbottom line of the bank to the unflinching trust of the promoters and customersof the Bank especially from the J&K state. He commended the managementteam, business heads & operative staff for robust credit growth, managementof NPAs, NPA recovery, improvement in Compliance culture etc. despite achallenging environment.  

“Our numbers are unfolding in line with our strategicbusiness plan to direct the focus of our credit expansion in J&K stateespecially in retail & SME segments. We are continuously gaining marketshare in J&K besides improving the penetration of credit to hitherto creditstarved geographies/segments especially in consumer and housing sectors. If yousee our segmental numbers in retail, housing has grown by 79% from 3117 Cr to5384 Cr, Consumer finance has grown exponentially from 195 Cr to 1978 Cr, Carloans have grown by 37 % from 2000 Cr to 2741 Cr resulting in aggregate retailcredit growth of 33%. The Corporate to retail mix of our overall advances isnow 43 Corporate  to 57% retail ascompared 53 Corporate to 47 Retail a couple of years ago.” announced theChairman.

“The results also validate our medium term growth strategywhich is fanning out as envisioned to achieve a total business of about 2.5 Lakh crore with a targeted profit of Rs2000 Cr, NIIM ranging between 3.5-4%, ROA of 1.3%, ROE of 16% and credit costbelow 1% at the end of FY 2022. We will carry forward the momentum of therobust business growth of previous fiscal to the current Financial Year and setthe tone of exponential growth for strengthening the new paradigm of sustainedprofitability. I can say confidently that once our provisioning requirementsdue to ageing of NPAs are over may be in 3-4 quarters, the best in terms ofbottom line is yet to come,” added Parvez Ahmed.

Outlining his vision to take the growth and business of thebank to the next level the Chairman informed about the roll out of new Zonalstructure at the District level w.e.f. Q2 of the current financial year todovetail the state governments budget/development plan with the business planof the bank with a vision of socio economic development of the state. The Bankhe added will be targeting to extend its outreach for facilitating the vastmajority of rural population of the state including the bottom of the pyramidpopulation, which is dependent on informal channels for their financial needs.This he said will further strengthen the Bank’s low cost CASA franchise, whichat 50.7% isone of the best in the banking industry.

“As I have been saying earlier too, we see a lot of unmetdemand and potential for increased lending in sectors of SME, TourismInfrastructure, Agriculture & Allied, Infrastructure(Government Spending),Home Loan, Personal Finance to Govt. Employees, Horticulture, Gold Loans etc.which is validated by exponential growth in the past few quarters.Promoting thestartups & new entrepreneurs also remains our priority area as we go deeperin the geographies in congruence with the policy support for startups at thestate and central government level and we will act as an enabler for the brightyouths of our state,” said Parvez Ahmed in the statement issued to the press.

The Bank’s total business as on the close of 31st March 2019touched 1,61,864 Cr comprising of deposits of Rs 89638Cr and gross advances ofRs72226 Cr  as compared to 1,42,466 Cr anyear ago registering an increase of around 14%. The Bank reported a stable lowcost of funds at 4.90% with a CASA contribution of 50.7%. The NPA coverageratio has seen a minor dip on sequential basis to 64.30 % mainly because ofdowngrade of the IL&FSand its group companies. As a percentage of total loans,the Gross and Net NPA ratios of the bank improved to 8.97% and 4.89 % ascompared to 9.96% and 4.90% a year ago.Notably the Bank recovered NPAs of Rs2750 Cr during the year besides making provisions of over Rs. 1000 crore forbad & doubtful debts.

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