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Jammu & Kashmir Bank posts 66% growth in profit

Jan 22, 2007:

J&K Bank has recorded a net profit of Rs 83.89 crore in the third quarter of 2006-07, an increase of 66 per cent from Rs 50.64 crore in the corresponding quarter of 2005-06. The bank’s operating profit is up by 36 per cent at Rs 144.15 crore in Q3-07 as compared to Rs 106.06 crore in Q3 of 2005-06.

The Board of Directors of J&K Bank approved the Bank’s accounts for the quarter and nine months ended December 31,2006 at its meeting held at Jammu today, a bank spokesman said.

The total deposits stood at Rs 20,296 crore with advances of the order of 14,831.18 Crores as on 31.12.2006 registering thereby a growth of 22 per cent. Net Interest margin is up from 2.97 (Q306) to 3.56 per cent (Q307) while as net NPAs have decreased from Rs 136.29 crores to 108.84 crores as on 31.12.2005.

The Net NPAs as a proportion of Net Customer Assets were 0.73 per cent in Q3 of current financial year, considerably down from 1.13 per cent of the corresponding period of previous financial year. A 43 per cent increase in provisioning over the previous quarter of current financial year result in an NPA coverage ratio of 73.13 per cent as compared to 57.49 per cent as at the end of previous year’s corresponding period.

The CASA ratio of the Bank improved from 34.18 per cent as on 31.12.05 to 40.42 per cent as on end of Quarter 3 of FY07.The cost of deposits was down to 4.83 per cent (Q307) from 5.00 per cent (Q306).The NIM for nine months of 06-07 was 42 basis points up at 3.22 per cent as against 2.8 per cent for the same period last year.

For the quarter ended 31.12.2006, the yield on Advances registered an increase 38 basis points at 9.41 per cent over that of 9.03 per cent of corresponding period of previous year, considerably up from 8.48per cent of FY06. The return on assets was up from 0.91per cent (Q306) to 1.40 per cent(Q307)

Despite a growth of 22per cent in advances over those of Q306, the Bank’s Capital Adequacy at December 31,2006 was 14.57 per cent, well above RBI’s requirement of 9per cent. At the corresponding previous year period, the capital adequacy was 14.40per cent

Appetite of foreign investors in the bank’s stock continues to grow. In the light of this, the bank received the approval from RBI to increase the cap of FII’s from 33 per cent to 40per cent. Some major deals have taken place on the bank’s stock over the bourses ranging buyers from vanilla to hedge funds.

The bank is continuously focusing on increasing its business in the state through SME, retail and micro-finance lending. With a view to increase its business in the high margin sectors, the bank recently carried out “JK Bank Reaching out to All” programme in two blocks of J&K. The programme is now being rolled out in all the districts of the state. The programme apart from helping the bank in acquiring low cost deposits opens vast opportunities for microfinance lending in the vast unbanked spaces and sectors.


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