J-K bank's profit rises 27% to Rs 415 cr in Apr-Jun quarter on high income

Srinagar (Jammu and Kashmir) [India], July 27: Announcing a significant increase in quarterly profits, J&K Bank today posted Rs 415.49 crore as profit-after-tax (PAT) for the April-June quarter of the current financial year, which is up by 27 percent YoY from Rs 326.45 Cr recorded for the first quarter of the previous financial year.
The Bank announced its Q1 results today after the Bank's Board of Directors approved the quarterly numbers in a meeting held here at the Bank's Corporate Headquarters.
"The bank's net interest income (NII) grew by 7% YoY to Rs 1369.22 crore in the first quarter of the current financial year, while the net interest margin (NIM) has improved by 9 basis points QoQ to 3.86% from 3.77% registered in Q4 of FY 2023-24," As per a statement from the Jammu and Kashmir Bank.
"Core operating profit of the bank witnessed an increase of 13 percent YoY and reached Rs 594.67 crore from Rs 528.05 crore. The bank's return on assets (RoA) for the June quarter stood at 1.08 percent as against 0.94 percent recorded during Q1 of the last financial year," the statement added.
Commenting upon the results, MD & CEO of J&K Bank, said, "With improved bottom line, our performance in the first quarter reflects the resilience and strength of the Bank. The key financial metrics have shown notable improvements, reflecting healthy progress. And with our return on assets above 1 percent, we have also maintained the NIM in the upper band of our market guidance, i.e. near 4 percent at 3.86 percent, despite pressure on margins."
Advances of the bank grew over 13 percent YoY and stood at Rs 95449.77 Cr as against Rs 84475.63 Cr in the corresponding quarter a year ago. The deposits also increased by 9 percent to Rs 132573.13 Cr from Rs 121297.49 Cr recorded last year. During the quarter, the Bank's CASA ratio stood at 49.77 percent.
Commenting on the business growth, MD said, "There is a healthy growth in our advances and deposits, demonstrating the trust and loyalty of our customer base, especially in our core operational geography."
He further said, "However, on account of the increased outflows of government . funds witnessed usually during our first quarter, there is a temporary dip in the CASA ratio this time but we are confident that we can maintain it above 50 percent annually. And we have already sharpened our focus to augment our strong liability franchise."
"We also foresee growth in business, coming from the developmental drive of massive infrastructure being put into place to meet the growing requirements of the increasing tourist inflow into J&K", he added.
In sequential terms, the bank's gross non-performing assets (GNPA) have reduced by 17 basis points to 3.91 percent from 4.08 percent registered in the March quarter of FY 2023-24. The net NPA for Q1 has also improved further to 0.76 percent QoQ, as against 0.79 percent recorded during Q4 of the previous financial year. The NPA coverage ratio for Q1 stood at 91.57 percent when compared to 87.55% recorded for Q1 last year.
Regarding asset quality, the MD & CEO asserted, "We have brought our GNPA to below 4% this quarter and the trend will continue to be healthy in our asset quality, which continues to be our star metric," adding, "Besides, as per our market guidance, we have maintained our NPA coverage ratio above 90 percent at 91.57 percent".
MD & CEO also spoke about the steady transformation of the bank: "In terms of operational excellence, we are steadily emerging as a lean, agile and digitally driven financial institution."
"During the last many quarters, we have transformed the digital interface of the Bank and are on track to accomplish the goal of becoming 100 percent digital not only in our services framework but also in our internal work processes. By the end of current financial year, we are planning to digitally on-board our remaining products, thereby, opening up infinite possibilities for online journeys within the country's banking sector. The strategic objective is to become 'Bank for all generations'."
"Our commitment to innovation and customer-centric growth shall continue while delivering value to our customers and stakeholders and maintaining the Bank's position as the leading financial institution in the region and the country", the MD said.
During the quarter, the bank's capital adequacy ratio (BASEL III) has improved to 15.07 percent, as against 14.83 percent recorded last year.
On capital position of the Bank, the MD & CEO remarked, "With CRAR at above 15percent, I think we are adequately capitalised to fund our future growth plans."