J&K Bank Q3 net profit up 33% at Rs 65.94 Cr

Srinagar, Feb 9: Despite higher COVID-related provisioning, J&K Bank has delivered profits
for the third consecutive quarter of the current financial year. The bank stated this today
after the Board of Directors of the Bank reviewed and approved the Third Quarter and Nine
Month Results (December 31,2020) in a meeting held here at the bank’s Corporate
Headquarters.
Performance Highlights
Backed by higher Net Interest Income (NII), the Bank’s profit is up by 32.84% YoY at Rs
65.94 Cr against Rs 49.64 Cr recorded for the third quarter of last financial year. The
bank’s net interest income, or core income, has increased by 15% YoY to Rs 1005.13 Cr
from Rs 874.65 Cr recorded for the corresponding period last year. In aggregate terms, the
bank has clocked Rs 116.37 Cr net profit for nine-months of the current fiscal.
The operating profit of the bank has jumped 68% to Rs 563.47 Cr as against Rs 335.56 Cr
recorded on December 31, 2019, while as the other income segment has more than doubled
to Rs 271.65 Cr from Rs 128.66 Cr recorded for Q3 of last financial year. The Net Interest
Margin (NIM) for the quarter has improved to 3.88% (annualized) as against 3.68% recorded
last financial year.
“Delivering profits for three consecutive quarters testifies to our institutional resilience and
our resolve to brave all odds through a triad of focused-policy, efficient-execution and
effective-oversight. And, with these numbers, I think we have laid a stronger and better
foundation for growth-momentum that also remains the focus not only of banking industry’s
outlook but at the heart of country’s economic stance amid country-wide Covid-vaccination
drive”, commented the bank’s CMD R K Chhibber on the occasion.
Higher Provisioning
Exhibiting prudence, the bank has increased the provision cover to create adequate buffer
to further strengthen its balance sheet.
The Provision Coverage Ratio for the reviewed quarter is at 83.67 % – one amongst the
highest in the industry – as against 73.30 % recorded during the corresponding period last
year.
Asset Quality
Meanwhile, the bank’s net NPA’s as percentage to net Advances ratio has halved to 2.50%
from 4.36 % while as the Gross NPA ratio has sharply declined to 8.71% from 11.10%
recorded as on December 31, 2019.

Regarding the bank’s asset-quality, the CMD asserted, “Since we have provided for stressed
accounts upfront, the asset quality of our loan book is much better today thus making our
balance sheet fundamentally stronger than it was a year ago. However, we will remain alert
to any fresh slippages, make further provisions and move cautiously as many policy-minds
forecast difficult NPA scenario ahead for the country’s banks. At the same time we would
keep our sights locked on NPA recovery and encourage one time settlements within the
regulatory norms”
Business Growth
The advances have increased by 3% from Rs 64488.06 Cr to Rs 66545.32 Cr during the
quarter reviewed while as the deposits have shown a steady growth of 11% from Rs 93170.
08 Cr to Rs 103804.23 Cr. However, the bank has witnessed 13% growth both in advances
and deposits’ portfolios in the UT of J&K despite sluggish market conditions across the
country.
The CASA Ratio of the bank during the reviewed quarter is 54.44% as against 51.54%
recorded as on 31 st December 2019.
Regarding the business growth, the CMD said, “We have performed quite well despite tough
market conditions and secured a decent bottom-line while registering a double-digit growth
in advances as well as in deposits in the UT of J&K. The growth in advances comes on the
back of incredible performance vis-à-vis priority sector lending with focus on government
sponsored cases. Also the Bank has registered impressive lending numbers of around Rs 1800
Cr under Centre’s Atmanirbhar programme.”
“Owing to the Government’s focus on infrastructure spending, we expect a sizable growth
in our lending book in the upcoming quarters”, he added.
Capital Adequacy
The bank’s Capital Adequacy Ratio is at 11.77 %, which is quite well within the BASEL III
norms, as against 11.10 % recorded as on December 31, 2019.
“The process for augmentation of capital by the bank is already in advance stage and once
done, it shall boost our lending capacity to the more productive sectors of economy”, the
CMD said.
Further, shedding light upon other priorities of the bank in upcoming quarters, the CMD
said, “The bank will sharpen its focus to improve service delivery mechanisms further,
expedite the process of succession planning, complete the process of hiring specialized
professionals besides recruitment of Probationary Officers and Banking Associates,
incentivize performance through career progression, upskill human resource in
specializations to meet the challenges of new-age banking while ensuring a transparent and
accountable corporate governance system.”