J&K Bank profits rise 39% to Rs 167.56 crore

Our Banking Bureau

Mumbai, May 22: THE Jammu & Kashmir Bank (J&K Bank) has reported a 39.44 per cent rise in its net-profit for the fiscal 2000-2001 to Rs 167.56 crore from the Rs 120.17 crore notched up in the preceding fiscal. Gross profit is up by 21 per cent to Rs 281 crore (Rs 232 crore). The board has recommended a 40 per cent dividend for the fiscal 2000-01.

The bank’s business turnover grew by 23 per cent to Rs 15,931 crore (Rs 13,210 crore) during the period. An impressive performance has been witnessed in deposits and credit growth. Deposits grew by 19 per cent to Rs 11,168 crore (Rs 9,422 crore). “Deposits would have been much higher if the bank had accepted high cost deposits,” J&K Bank chairman, MY Khan said.

The bank’s credit offtake rose by a substantial 35 per cent to Rs 4,763 crore (Rs 3,518 crore), even amidst the fallen overall credit growth rate in the country’s banking sector. Investments rose by 28 per cent to Rs 5,425 crore (Rs 4,254 crore).

The credit-deposit ratio stood at 42.65 per cent and the bank is looking to make it around 50 per cent within the current fiscal. Net non-performing assets (NPAs) during the year came down to 2.45 per cent from 3.22 per cent. In absolute terms, net-NPAs stood at Rs 115 crore.

The bank’s foreign exchange business also recorded a turnover of Rs 2,402.06 crore (Rs 1,764.30 crore), reflecting a jump of 36.15 per cent. Capital reserves increased to Rs 699.51 crore (Rs 528.16 crore). The capital adequacy ratio (CAR) stood at 17.44 per cent, well above the regulatory level. “The bank has chalked out extensive plans to spread its business all over the country and is planning to set up 20 more branches of which 15 will be set up outside Jammu and Kashmir. The bank had a network of 426 branches at end-March 2001. During the period, 55 branches were computerised, raising the total number to 205, which comprises about 80 per cent of the bank’s business,” Mr Khan said. After the Reserve Bank of India (RBI) allowed banks to lend at sub-PLR rate, the bank offered term loans not exceeding Rs 100 crore with an interest rate of 11.50 per cent—50 basis points below its prime lending rate (PLR) of 12 per cent. It is considering to offer another Rs 100 crore shortly at 10-15 basis points less than the PLR.

“With the bank having the lowest cost of deposits (6.93 per cent) in the banking sector, we can afford to offer sub-PLR rates,” Mr Khan said.