J&K Bank announced its quarterly (Q4) and yearly results for the financial year 2019-20, on 29th June 2020, after its Board of Directors adopted the audited numbers of the Bank in its meeting.
As per the yearly numbers, the Net interest income (NII) of the bank increased by around 10 % Year-on-Year (YoY) and stood at Rs 3706.67 Cr for FY 19-20 as against Rs 3383.93 Cr reported during last financial year. The bank's advances stood at Rs 64399 Cr while as the deposits witnessed growth of over 9 % reaching up to Rs 97788 Cr from Rs 89639 Cr thereby increasing the total business of the bank by 4% to Rs 162187 Cr.
The operating profit of the bank before provisioning stood at Rs 1525.05 Cr. However due to substantial increase in provisioning requirement to the tune of Rs 2523 Cr made towards bad and doubtful assets (out of which Rs 1053 Cr pertains to March-2019 mainly for the IL&FS group which was recommended by RBI in its exception reports, and in the last quarter of the FY2019-20 mainly due to provisioning against the bank's exposure to Anil Ambani Reliance Group), the bank registered a net loss of Rs 1139.41 Cr for the FY ended March 2020
As a way to strengthening its bottom-line in near future, the bank increased its Provisioning Coverage Ratio (PCR) to 78.59% from 64.30 % YoY. The net NPA for the Q4 has come down considerably to 3.48 % when compared to the figure of 4.89 % reported during the corresponding quarter of last FY.
Commenting upon the results, the bank's Chairman R K Chhibber said, "The numbers are quite evident and adequately mirror the times wherein the financial institutions around the globe appear grappling with impact of unprecedented lockdowns amid the ongoing pandemic while highlighting the resilient nature of our Human Capital to deal with such crisis of colossal proportions."
"Being an institution of systemic importance for the region, our entire focus continues to remain on managing the crisis well while taking all the measures to serve people safely and adequately besides spurring the demand during the eased-out lockdowns. Throughout the challenging period in the region beginning August last year, our entire staff successfully managed to keep all the financial services available to the people despite odds. As a socially responsible institution of the region, we understand the current economic situation quite well and its impact on all our stakeholders, businesses and people at large", the CMD asserted.
Regarding the bank's focus areas, he further said, "Amid all the uncertainty around, we kept a sustained focus on strengthening our balance-sheet. Taking cognizance of the continued pressure on asset quality due to COVID-19 and its lasting impact, we increased our NPA Coverage ratio by more than 14 % from 64.30 % to 78.59 % while bringing down our net NPAs considerably from 4.89 % to 3.48 %", adding that the NIM at 4.10 % was among the best in the industry and the cost of deposits were brought to 4.73% from 4.98% by improving the CASA base to 53.66 %.
"Liability franchise of the bank is improving with significant growth in CASA component. Saving bank deposits recorded growth of 18 % on YoY basis", he said.
"Notably, the loan-book of UTs of J&K and Ladakh have witnessed 13 % growth thereby re-orienting the lending composition of the bank with J&K and Ladakh getting 63 % of total advances in country", the CMD said while explaining the bank's studied shift from corporate to retail lending.
Acknowledging the government's support throughout the history of bank especially since last year, the Chairman said, "As the promoter and majority stakeholder of J&K Bank, the UT Government of J&K has remained ever committed in its support towards the bank and timely capital infusions in recent times glaringly exemplify the same. The infusions – most recent being the Rs 500 Cr capital infused during Q4 of FY 2020 – have played a significant role in maintaining the bank's Capital Adequacy Ratio (CAR) as per Basel-III requirements besides boosting the confidence of all other stakeholders in the bank."
"Notably, the Bank staff has been working tirelessly during the recent crisis", the Chairman asserted, "and living up to the people's expectations by providing banking services across its branch networks, ATMS, digital platforms and remotely operating Business Correspondents.."
Pertinently, under the Central Government's Guaranteed Emergency Credit Line (GECL) scheme, the Bank has so far disbursed an amount of Rs 1068.74 Cr to 31069 borrowers. Besides Govt sponsored financial support to economically weaker sections, the Bank has been continuously innovating its financial offerings in order to provide much needed liquidity support and business continuity plans to the stressed business community of the region. "With inclusion of SMA2 and SMA1 borrowers under the recently launched bank's schemes i.e. JK Bank Business Support Loan and JK Bank Business Support Loan – Hotels and Guesthouses; it is expected that substantial credit shall be pumped into the regional economy on a consistent basis in order to lubricate the market with funds and mitigate the harmful shocks of devastated demand.", the chairman added.
Meanwhile, the bank has been on the forefront in terms of providing the much needed Govt funded support to economically vulnerable sections of the society during the Covid19 pandemic. An amount of Rs 126.66 Cr has been transferred to 2533288 PMJDY women accounts in three phases while as Rs 187.85 Cr were deposited into 939277 farmer accounts under the PM- Kisan.