Despite adverse market conditions prevailing in the state, Jammu and Kashmir Bank has registered a business turnover of Rs 51,975.56 crore during the quarter ended June and operating profit of Rs.256 crore, recording a 41 per cent increase over the same period last year.
The Bank made a net profit of Rs 117.05 crore, an increase of 24 per cent over Rs 94.56 in the corresponding period of the previous year, a bank spokesman said today.
The spokesman reasoned the growing profits "vet our renewed strategy where we have focussed on J&K and our investment strategy in a declining interest rate scenario."
He said the bank had tailored a wide range of financial products to suit various sectors of the economy which contributed to the healthy performance of the Bank.
This initiative had resulted in "tapping the unexplored areas of our economy and enhanced our outreach to unbanked areas in the state," the official added.
The spokesman said the bank had also leveraged technology to maximise efficiency and bring down the operating expenses.
The bank announced the unaudited financial results for the quarter, following the approval of its Board of Directors.
The spokesman said the Gross NPAs and the Net NPAs as a proportion of the Gross and Net Customer Assets for the quarter ended June, were at 2.44 per cent and 0.77 per cent respectively.
The NPA Coverage Ratio, which is an indicator of safety and shows the level of provision a bank has for its bad assets, has gone up to 68.79 per cent from 59.53 per cent a year ago.
It is now amongst the highest in the industry. As a result of efficient leveraging of its assets, the Bank has been able to bring down its Cost to Income ratio to 32.79 per cent from 37.66 per cent a year ago.
The Return on Assets has improved to 1.29 per cent (annualised) compared to 1.16 per cent a year ago.
Due to improvement in yield on advances from 10.37 per cent in quarter one Financial Year 2008-09 to 11.55 per cent for the current quarter, the interest income on advances went up by 19 per cent on a Year on Year basis.
Despite increase in Interest expenses by 20 per cent Year- on-Year, attributed to rising cost of deposits, bank has been able to maintain its margins at 3.10 per cent due to a concurrent increase in the lending rates, he said.
Operating Income (Net Interest Income plus Other Income) stood at Rs. 381.67 crore for the quarter as against Rs. 291.13 crore for the corresponding quarter of last fiscal, registering an increase of 31 per cent.
The Other Income of the Bank has gone up by 78 per cent to Rs. 115.68 crore from Rs 64.88 crore a year ago, largely on account of trading income.
The Bank has restructured loans during the quarter to the extent of around Rs 100 crore mostly by way of realignment of interest rates.
The Capital Adequacy Ratio under the Basel I norms stands at 14.33 per cent at the end of June 30 and Tier I capital amounted to 13.63 per cent.
Net Worth of the Bank stood at Rs.2739.91 crore as on June 30 compared to Rs. 2403.49 crore a year earlier, registering a growth of 14 per cent, the spokesman said.
