Jammu and Kashmir Bank disclosed a drop in standalone net profit for the quarter ended March 2015. During the quarter, the profit of the bank declined 59.45% to Rs 1,016.10 million from Rs 2,506.00 million in the same quarter last year.
Total income for the quarter rose 7.14% to Rs 20,235 million, compared with Rs 18,886 million for the prior year period.
Mushtaq Ahmad, chairman of the J&K Bank said, ''The stress in country's economy is far from over. Very slow economic growth across the country has compounded the revival of stressed assets in the banking system which in turn has resulted in continuation of stress on asset-quality of the banks during the FY 2014-15.
As such there is a course correction going on across the industry and we too had to go for higher provisioning with the objective of having a higher Provision Coverage Ratio (PCR). We have provided Rs.265 Cr in excess of required regulatory requirements thereby improving our PCR to 59% from 51% as recorded in the quarter ending Dec. 31, 2014.
The cleansing and consolidating of balance sheet has led to a major slash in the bank’s profits because strengthening balance sheet remained our top priority.
Even now the bad loans continue to swell across the industry, which analysts and rating agencies predict will increase during the current year as well.
Thus improving our asset quality shall engage our total focus till economic growth starts picking up and NPA scenario improves. Besides, we have put in place a robust mechanism for NPA management enabling us to track down early warning signals in our loan-book.
Having said that, we will maintain our growth momentum and profitability with an improved Net Interest Margin (NIM) during the current fiscal.
At home front in J&K, we are slowly but surely coming out of the effects of damaging September deluge and I expect a steady increase in lending here particularly in infrastructure, agriculture and SMEs in the current financial year.
Playing the developmental role in revival of state economy, the bank has already taken all possible measures aimed at rehabilitation of units affected by floods.
Post-floods, we have disbursed around Rs 7 billion additionally through our relief and rehabilitation package in the state. Besides, our business partner Bajaj Allianz has already paid out more than Rs 10 billion while settling 30,000 claims of our customers from different sectors of economy including SMEs, handicrafts and small businesses.''
