SRINAGAR: J&K Bank, the premier financial institution and a listed entity of the state, on Thursday declared a robust start to the Financial Year 2018-19 by posting a net profit of Rs 52.59 crore for the first quarter ended June 2018 registering 75 percent increase over the net profit of Rs 30.19 crore reported for the June quarter in the previous financial year.
The reviewed results were declared on Thursday after the bank board adopted the numbers in the meeting held here at the bank’s corporate headquarters.
The bank’s total income increased to Rs 1897.24 crore from Rs 1790.53 crore recorded during the corresponding period of the FY 2017-18. Net Interest Margin (NIM) of the bank for the quarter is 3.66percentas against 3.19percentin March 2018. The cost of deposits has reduced to 4.83percentas against 5.27percentrecorded for the corresponding quarter last year, a bank handout read.
The Provision Coverage Ratio, a measure of banks cushion against bad debts, stood at 66.78 percent. The bank has reported improvement in its Gross NPA ratios to 9.83% as compared to 10.79% recorded at the end of corresponding quarter last year. The net NPA stood at 4.65 percent, read the handout.
The Capital Adequacy Ratio (CAR) of the bank has improved to 12.42percentfrom 11.10percentas of June 2017 against the regulatory requirement of 10.88 percent.
The advances of the bank grew to Rs 59841.05 crore as against a figure of Rs 48733.19 crore a year ago posting a credit growth of 23%. The deposits of the bank showed a muted YoY growth of 7.91 percent to Rs 77419.57 crore from Rs 71744.48 crore reported during the last year, it read further.
Commenting on the results, J&K Bank Chairman, Parvez Ahmed said, “The bottom-line has been aided by credit growth in J&K business which contributed to increase in interest income of the bank. We continue to reduce share of corporate loans which now constitutes 48% of our loan book. In the J&K state business our focus has been on MSME, housing, personal and startups. The outcomes are in line with the reoriented strategy put in place and we are quite confident today that the bank is not only on a sustained recovery path but has already begun to leverage the growth prospects in the state economy.”
“We have provided an amount of Rs 255 crore during the quarter for the NPAs to maintain our Coverage ratio at levels comparable with the best in the industry. Simultaneously, we have recovered/upgraded NPAS of Rs 535 crore during the quarter. Though we have made NPA recoveries of Rs 4250 crore in the last two years, recovery of bad loans will continue to be the topmost priority”, he added “With raising of Additional Capital of Rs 1000 crore during the quarter our capital position has improved markedly with our Capital Adequacy Ratio (CAR) at 12.42 percent, which is much better than the regulatory requirements of 10.88 pc. It has also enabled the bank to expand our credit aggressively within the state to capitalize on the opportunities in the potential sectors of state economy. We are confident that we will be achieving a credit growth of over 20% during the current financial year”, asserted the chairman.
“We are continuing to improve our digital footprint by not only increasing percentage of digital transactions but are also leveraging the cost cutting opportunities by digital acquisition of retail loans through our Phone Pe Loan channel. Over a period of current financial year we are targeting migration of all our institutional customers to the digital channels by entering into MOUs for preferred customer status to them” said the chairman.
Describing the challenges faced by the bank, he said,” Stress on income still prevails on account of provisioning requirement as per ageing of NPAs besides due to reversal of interest booked on JK state restructured portfolio for the 03 remaining quarters as per the staggering allowed by the RBI. Restructured loans of J&K have to be managed well to avert slippages,” the handout added.