Re: Jammu & Kashmir Bank

Mushtaq Ahmad, CM & CEO addr the call.Highlights by Capital Mkt
For the quarter ended September 2015, the bank recorded a stagnant net interest income at Rs 694.47 crore as interest earned fell 4% to Rs 1721.33 crore and interest expenses fell 7% to Rs 1026.86 crore.Other income jumped 49% to Rs 126.51 crore after which net total income grew 6% to Rs 820.98 crore. As operating expenses grew 11% to Rs 383.27 crore, OP rose 1% to Rs 437.71 crore. Provision and contingencies fell 24% to Rs 126.58 crore. PBT grew 18% to Rs 311.13 crore. As taxation grew 25% to Rs 115.51 crore, PAT grew 14% to Rs 195.62 crore.
NIMs for the quarter ended Sep, 2015 at 4.02 % (annualized) vis-à-vis 4.01 % y-o-y.During the quarter, Post tax Return on Assets was 1.10 % (annualized) compared to 0.96 % y-o-y.During the quarter, post tax return on Average Net-Worth (annualized) stood at 12.29 % compared to 11.60%.During the quarter, cost of deposits (annualized) stood at 6.41% compared to 6.80%.
During the quarter, yield on advances (annualized) stood at 11.29 % as compared to 11.91 % for the quarter ended Sep, 2014For the six months ended September 2015, the bank recorded a 3% rise in net interest income at Rs 1389.31 crore as interest earned fell 3% to Rs 3474.05 crore and interest expenses fell 7% to Rs 2084.74 crore.
Other income jumped 22% to Rs 262.14 crore after which net total income grew 6% to Rs 1651.45 crore. Provision and contingencies fell 18% to Rs 339.45 crore. PBT grew 15% to Rs 556.57 crore. As taxation grew 24% to Rs 202.19 crore, PAT grew 10% to Rs 354.38 crore.
For the six months, NIMs stood at 3.97 % (annualized) vis-à-vis 3.83%.Post tax Return on Assets stood at 0.99 % (annualized) for the half year compared to 0.84%.Post Tax Return on Average Net-Worth (annualized) for the six months stood at 11.27% compared to 10.29%.For the six months, Cost of Deposits (annualized) stood at 6.40% compared to 6.84%.
Gross NPA stood Rs 3081.68 crore as on September 2015 against Rs 2186.94 crore as of September 2014 and Rs 2994.50 crore as of June 2015.In percentage terms, %GNPA stood at 6.48% as on September 2015 against 4.73% as of September 2014 and 6.63% as of June 2015.Net NPA stood at Rs 1269.69 crore as on September 2015 against Rs 1108.53 crore as of September 2014 and Rs 1276.76 crore as of June 2015.In percentage terms, %NNPA stood at 2.78% as on September 2015 against 2.46% as of September 2014 and 2.95% as of June 2015.
Other details:NPA Coverage Ratio as on Sep, 2015 at 61.92 % as compared to 54.85% a year ago.Cost to Income Ratio stood at 45.74 % for the half year ended Sep, 2015 as compared to 43.06%.Capital Adequacy Ratio (Basel III) stood at 12.76 % as on Sep, 2015 (RBI norm 9 %), which was recorded at 12.66 % as on Sep, 2014.In terms of RBI circular, the bank has, effective from quarter ended June 2015, included its deposits placed with NABARD, SIDBI and NHB on account of shortfall in lending to priority sector under “Other Assets” until now these were included under investments. Interest income on these deposits has been included under “Interest earned others”. Until now such interest income was included under “Interest earned – income on investments”.Interest on loans and advances fell 6% during the quarter to Rs 1259.48 crore.During the quarter, Other income jumped 49% to Rs 126.51 crore. Commission / Exchange, component of other income, grew 28%to Rs 49.00 crore. Insurance Commission grew 44% to Rs 9.17 crore, Treasury / Trading Income jumped 110% to Rs 38.83 crore and Miscellaneous Income grew 37% to Rs 29.51 crore.
Demand deposits fell 0.22% to Rs 5678.32 crore, savings deposits rose 10% to Rs 21306 crore and Term Deposits fell 7% to Rs 35457 crore.Restructured assets stood at Rs 2486.23 crore and there has not been any major change.Deposits in J&K State grew 9% to Rs 48053 crore, in Rest of India fell 24% to Rs 14389 crore and Whole Bank fell 1% to Rs 62442 crore.Gross advances in J&K State grew 14% to Rs 24545 crore, in Rest of India fell 6% to Rs 23428 crore and overall grew 3% to Rs 47973 crore.Gross advances to agriculture sector were 48%.Credit / Deposit (CD) Ratio (%) stood at 73.22% against 71.57% y-o-y.CASA Ratio (%) stood at 43.22% against 36.69% y-o-y.Branches – Excluding Extension Counters, Controlling Offices & RCC’s stood at 829 against 802 y-o-y.Capital Adequacy Ratio (%) Basel II stood at 13.07% against 13.09%.Capital Adequacy Ratio (%) Basel III stood at 12.76% against 12.66%.The banks operating in J&K have extended credit of Rs 8080.21 crore to 214155 beneficiaries during the first six months of 2015-16 thereby registering an achievement of 34.23% of the Annual Credit Plan (ACP) target in financial terms.
J&K Bank alone has disbursed Rs 5337.53 crore to 116207 beneficiaries, which accounts for 66% of the total credit disbursed by all (46 banks and financial institutions operating in Jammu and Kashmir during the period.The bank has improved its performance somewhat when compared to the corresponding period of the last year and with growth forecasts brightening for the country’s economy it expects a turnaround in the next 3 to 4 quarters.
In the floods aftermath and amid stagnation in the economy, the bank remained focused on balance-sheet cleansing and consolidation, improving the deposit mix besides provisioning enhancement. On all these counts it is moving ahead successfully.
The bank will continue to increase its market share in J&K through increased priority sector lending thereby giving boost to the agriculture and allied activities and craft economy.Increasing brick and mortar presence across the rural landscape of J&K shall remain at the heart of its focus.The bank also plans to increase its lending to tourism sector especially for infra-structural needs.Outside the state, the top rated businesses shall remain its preference within the niche lending markets.During the quarter there was slippage of Rs 202 crore.After the package given by PM Modi, next year is going to be very good.Non-J&K balance sheet grew by 15% the bank is focusing on GoI and top corporate houses.J&K balance sheet grew by 25%.