J&K Bank Q3 net profit up 79% YoY to Rs 312 Cr

Srinagar: J&K Bank Net Profit witnessed 79 percent rise year-on-year (YoY) to Rs 311.59 crore for the December Quarter of FY 2022-23 as against Rs 173.95 crore registered for the same period last financial year.

A statement of J&K Bank issued here said that the bank announced the results after its Board of Directors reviewed and approved the numbers for third quarter and nine-months ended December 31, 2022 in a meeting held on Monday at the bank’s Gurugram office in Delhi.

Well on its trajectory to meet annual profitability targets, the bank’s profit for nine-months is up 85 percent to Rs 721.05 crore from Rs 389.36 crore clocked during nine-months of the last fiscal.

PERFORMANCE HIGHLIGHTS

The Bank’s Net Interest Income (NII) surged by 27 percent YoY to Rs 1257.38 crore for the December quarter when compared to Rs 993.30 crore recorded last year, while growing 19 percent YoY for nine-months to Rs 3495.73 crore.

The bank’s Operating Profit grew by 65 percent YoY to Rs 544.11 crore for the December quarter, 2022.

The bank’s NIM has also improved by 54 basis-points (bps) YoY to 4.10 percent – the highest in last seven years – while as the Return on Assets rose to 0.92 percent for the December quarter from 0.57 percent recorded last year. With Yield on Advances improving by 90 bps to 9.34 percent, the bank’s steadily moderating cost-to-income ratio has come down further to 63.71 percent for the third quarter.

Commenting upon the quarterly growth numbers, MD and CEO Baldev Prakash said, “Driven largely by an improving asset-quality through better SMA management and vigorous recoveries, we have achieved a better set of numbers in our December quarter. And we remain committed to sustained improvement in our overall functioning and the operating results as communicated in our financial-year guidelines.”

IMPROVED ASSET-QUALITY

The Gross NPA Ratio of the bank has further come down 168 bps YoY and 42 bps QoQ to 7.25 percent for the quarter while the Net NPA ratio has moderated YoY by 94 bps to 2.08 percent. Provision coverage ratio (PCR) of the bank stood at 84.83 percent for the quarter ended December 2022.

Regarding the bank’s asset-quality, Managing Director (MD) and Chief Executive Officer (CEO) of J&K Bank, Baldev Prakash said, “Through an ensured institutional focus on the asset-quality, we have brought down our Net NPAs to 2.08 percent, which is the lowest in last eight years. While each passing quarter is witnessing an improvement in our GNPA figure, we have reduced it further to around 7 percent, and our Provision Coverage Ratio for the quarter is about 85 percent.” He said that with strict regime of early-warning systems, pro-active monitoring and review mechanisms at all levels coupled with rolling out of timely OTS schemes, the bank was confident of reducing gross NPAs to around 6 percent by the end of fiscal.

BUSINESS GROWTH

Meanwhile, the bank’s net advances are up 14 percent YoY and 4 percent QoQ to Rs 77,639 crore during the quarter reviewed while the deposits have grown 8 percent from Rs 1,09,298 crore to Rs 1,17,935 crore. However, the bank witnessed 21 percent YoY growth in advances in its operational geographies across Rest-of-India (RoI). The bank’s overall business increased by 10 percent to Rs 1,95,574 from Rs 1,77,664 crore recorded last year while the bank’s CASA Ratio continues to remain one of the industry best at about 54 percent.

Commenting on growth numbers, the MD and CEO of J&K Bank said, “Both our advances and deposits have grown by 14 percent and 8 percent, which are quite in line with industry averages. However, witnessing growth at 21 percent, the RoI share in the overall loan-book has crossed 30 percent mark during the December quarter in line with the financial-year guidelines.”

COMFORTABLE CAPITAL CUSHION

With tier-II capital augmentation of over Rs 1000 crore, the bank’s Capital Adequacy Ratio rose up to 13.82 percent as against 12.38 percent recorded as on December 31, 2021. “The capital augmentation through raising of tier-II bonds worth Rs 1021 crore during the December quarter has cushioned us to comfortably execute our envisaged growth plan especially in Rest of India. Our CRAR has improved to 13.82 percent,” MD and CEO Baldev Prakash said.