For future safety, bank settled for more floating provisions: Chairman
Srinagar: J&K Bank on Tuesday posted net profit of Rs 416.04 crore for the financial year (FY) 2015-16, statement issued by the bank said.
The audited financial results for the fourth quarter of the year ended March 2016 were announced on Tuesday following the approval of bank’s board of directors in their meeting held here at Corporate Headquarters.
With a view to make its balance sheet healthier and stronger for future, the bank registered a loss of Rs 56.02 cr for Q4 ended March 2016, said the statement.
In the meeting, the bank’s board of directors also recommended dividend of 175 percent to shareholders subject to the approval at the upcoming annual general meeting (AGM).
The advances of the bank up by 12.57 percent stood at Rs 50193.02 crore as against Rs 44585.82 crore recorded last year. The total business of the bank stood at Rs 119583.54 crore which is up by 8.37 percent as against Rs 110342.01 crore recorded during the last FY.
The deposits of the bank also registered growth of 5.53 percent and reached Rs 69390.25 crore at the end of March, 2016.
During the period under review, the bank earned an interest income of Rs 6843.57 crore while as the total income of the bank is Rs 7347.60 crore.
The net worth of the bank increased to Rs 6423.97 crore from Rs. 6110.05 crore which is up by 5.14 percent.
Meanwhile, J&K Bank chairman Mushtaq Ahmad said that for cleaning the balance sheet to make it stronger and healthier for future, the bank decided to settle for lesser profits and more provisioning for FY 2015-16.
He added that amid mounting volumes of stressed loans to an all-time high across the banking industry, “we registered an annual profit of Rs 416.04 crore.”
However, keeping an additional floating provision of Rs 150 crore in the fourth quarter, which is already in excess of the required provisioning, resulted in the booking of Rs 56.02 crore as loss for the quarter, he added.
“Providing a strong cushion for future, this helped us to take the annual figure of floating provisions to Rs 348.72 crore for the financial year under review,” the chairman said.
Ahmad said that slowly but surely, the banking industry is coming out of the extreme stressed condition “as we begin entering into an economic scenario with reportedly positive business sentiment, improved consumer confidence and more controlled inflation.”
The prospects for India’s economic growth appear to be brightening due to the infrastructural spending, implementation of projects and continuation of reforms, which suggests that India’s banking sector is poised for healthy growth in near future.
“In this backdrop, we are eyeing a credit growth of around 20 percent in J&K with special focus on agriculture, trade and services sectors,” said the chairman.
Laying greater emphasis on providing improved services to clients, the chairman said that J&K Bank was upgrading technology infrastructure to enhance the overall experience of the customers. “Also state-of-the-art monitoring system is being devised for prompt redressal of customer grievances,” he said.
Meanwhile, during the FY 2015-16 the bank has opened 40 Business Units besides commissioning 123 ATMs and 11 Cash Depositing Machines (CDM) across India.