JK Bank Q2 profit rises 45 pc

Srinagar, Oct 25: Jammu and Kashmir Bank on Friday reported 45 per cent rise in September quarter standalone profit at Rs 551 crore.

In the year-ago period, the bank had logged a profit of Rs 381.07 crore.

Net profit in April-September FY25 grew 36.6 per cent to Rs 966.41 crore from Rs 707.52 crore in the same period a year ago, a statement said.

Backed by both core and non-core income growth, the bank's operating profit in Q2 rose more than 47 per cent YoY and 32 per cent QoQ to Rs 787 crore.

Net Interest Income (NII) was up 7.7 per cent YoY to Rs 1,435.93 crore in the September quarter. Other income surged 55.6 per cent YoY to Rs 296.08 crore.

Net Interest Margin (NIM) improved to 3.90 per cent from 3.86 per cent recorded in Q1 while the cost to income ratio improved significantly to 54.56 per cent YoY from 64.93 per cent.

Commenting on the bank's Q2 numbers, MD and CEO Baldev Prakash said the results are almost in line with the expectations.

“The bottom-line growth underscores our financial prudence and operational excellence while reflecting our commitment to deliver consistent value for our stakeholders as we stay steady on course to achieve the annual numbers,” he said.

“I believe, with a healthy balance sheet, a diversified portfolio and consistent focus on digital transformation, we are well-positioned to maintain this growth momentum and capitalize on emerging opportunities.”

The bank's gross NPA ratio decreased by 131 basis points YoY to 3.95 per cent as against 5.26 per cent recorded in September 2023. Net NPA ratio also moderated to 0.85 per cent from 1.04 per cent.

Meanwhile, during the quarter the Return on Assets (RoA) jumped to 1.41 per cent YoY. Provision Coverage Ratio (PCR) also improved 55 basis-points YoY to 90.54 per cent.

Prakash said keeping gross NPA below 4 per cent highlights the success of the robust risk management practices of the bank.

“We have been focusing on proactive asset-quality management and ensuring long-term sustainability in lending. Another highlight of this quarter is RoA, which has surged to 1.41 per cent,” he said.

With continued improvement in key performance indicators, the bank is reinforcing its position as a leading financial institution focused on profitability and sound asset management, he added.

The bank's CASA stood at 48.60 per cent, which continues to be one of the highest in the industry.

Regarding business growth, the MD and CEO said during September quarter, “our growth in advances is near 10 per cent, while we have maintained the deposit growth within the range of industry average.”

Going forward, the bank will intensify efforts to strengthen deposit base and increase loan book to achieve its top-line growth numbers, he said.

“With a CRAR of almost 15 per cent, we remain well-capitalized, ensuring that the bank is positioned to support future growth opportunities while maintaining financial discipline. Pertinently, the CAR is exclusive of half-yearly profit of Rs 966 crore, which would otherwise result in taking the ratio to 16 per cent,” Prakash added.

He also emphasized on the prioritisation of carrying forward the digital momentum.

“Since our role as a developmental financial institution here is not just to provide credit, we have to take care that businesses are equipped with the tools they need to manage growth sustainably,” he said.

Therefore, by carrying forward the digital momentum, the bank is also revolutionizing the way its customers experience banking, making it more convenient, swift, secure and efficient for them with every passing day, Prakash added.

“Going forward, we have devised a comprehensive road map to help businesses particularly MSMEs get equipped with beneficial, convenient and efficient management solutions, through collaborative banking with our fintech partners, so that these enterprises sustain growth and enjoy prosperity.”