• PCR increased to 78.59%, Q4 NPA down to 3.48%
• CMD says bank will pump substantial credit into regional economy
J&K Bank registered 10 percent Year-on-Year (YoY) increase in its Net Interest Income (NII) which stood at Rs 3706.67 crore for FY 19-20 as against Rs 3383.93 crore reported during the last financial year.
The bank also increased its Provisioning Coverage Ratio (PCR) to 78.59 percent while its net Non-Performing Assets (NPA) has come down to 3.48 percent.
The bank announced its quarterly (Q4) and yearly results for the financial year 2019-20 on Tuesday after its Board of Directors adopted the audited numbers of the bank in its meeting.
The bank’s advances stood at Rs 64,399 crore while the deposits witnessed a growth of over 9 percent reaching up to Rs 97788 crore from Rs 89639 crore thereby increasing the total business of the bank by 4 percent to Rs 162187 crore.
The operating profit of the bank before provisioning stood at Rs1525.05 crore.
Owing to substantial increase in provisions to the tune of Rs 2523 crore made toward bad and doubtful assets against Rs 1053 crore made during the previous year, the bank registered a net loss of Rs 1139.41 crore for the financial year ended March 2020.
As a way to strengthen its bottom-line in the near future, the bank increased its PCR to 78.59 percent from 64.30 percent YoY.
The net NPA for the Q4 has come down considerably to 3.48 percent when compared to the figure of 4.89 percent reported during the corresponding quarter of last FY.
Commenting upon the results, the bank’s Chairman R K Chhibber said, “The numbers are quite evident and adequately mirror the times wherein the financial institutions around the world appear grappling with impact of unprecedented lockdowns amid the ongoing pandemic while highlighting the resilient nature of our human capital to deal with such a crisis of colossal proportions.”
“Being an institution of systemic importance for the region, our entire focus continues to remain on managing the crisis well while taking all the measures to serve people safely and adequately besides spurring the demand during the eased-out lockdowns. Moreover, throughout the challenging period in the region beginning August last year our entire staff successfully managed to keep all the financial services available to the people despite odds,” he said.
Regarding the bank’s focus areas, Chibber said, “Amid all the uncertainty around, we kept a sustained focus on strengthening our balance-sheet. Taking cognizance of the continued pressure on asset quality due to COVID-19 and its lasting impact, we increased our NPA Coverage ratio by more than 14 percent from 64.30 percent to 78.59 percent while bringing down our net NPAs considerably from 4.89 percent to 3.48 percent.”
He said the NIM at 4.10 percent was among the best in the industry and the cost of deposits were brought to 4.73 percent from 4.98 percent by improving the CASA base to 53.66 percent.
“Liability franchise of the bank is improving with a significant growth in CASA components. Saving bank deposits recorded a growth of 18 percent on YoY basis,” he said.
“Notably, the loan-book of J&K and Ladakh have witnessed 13 percent growth thereby re-orienting the lending composition of the bank with J&K and Ladakh getting 63 percent of total advances in country,” the CMD said explaining the bank’s studied shift from corporate to retail lending.
Acknowledging the government’s support throughout the history of bank especially since last year, the chairman said, “As the promoter and majority stakeholder of J&K Bank, the J&K governemnt has remained ever committed in its support toward the bank and timely capital infusions in recent times glaringly exemplify the same. The infusions - most recent being the Rs 500 crore capital infused during Q4 of FY 2020 - have played a significant role in maintaining the bank’s Capital Adequacy Ratio (CAR) as per Basel-III requirements besides boosting the confidence of all other stakeholders in the bank.”
He said, “Notably, the bank staff has been working tirelessly during the recent crisis and the banks lives up to the people’s expectations by providing banking services across its branch networks, ATMS, digital platforms and remotely operating business correspondents.”
Under the Government of India’s Guaranteed Emergency Credit Line (GECL) scheme, the bank has so far disbursed an amount of Rs 1068.74 crore to 31069 borrowers.
Besides the government-sponsored financial support to economically weaker sections, the bank has been continuously innovating its financial offerings in order to provide the much-needed liquidity support and business continuity plans to the stressed business community of the region.
“With inclusion of SMA2 and SMA1 borrowers under the recently launched bank’s schemes – JK Bank Business Support Loan and JK Bank Business Support Loan – to the hotels and guesthouses, it is expected that substantial credit shall be pumped into the regional economy on a consistent basis in order to lubricate the market with funds and mitigate the harmful shocks of devastated demand,” the chairman said.
Meanwhile, the bank has been on the forefront in terms of providing the much-needed government funded support to economically vulnerable sections of the society during the COVID-19 pandemic.
An amount of Rs 126.66 crore has been transferred to 2533288 PMJDY women accounts in three phases while Rs 187.85 crore were deposited into 939277 farmer accounts under the PM-Kisan.