J&K Bank Q1 Results: Net profit rises 27% to Rs 415 crore

J&K Bank on Saturday reported a 27 per cent rise in net profit to Rs 415 crore in the April-June quarter of 2024-25 compared to the year-ago period.

The bank had posted a net profit of Rs 326 crore in the April-June period of the previous year.

Total income in the first quarter of the current fiscal rose to Rs 3,188 crore as against Rs 2,885 crore, J&K Bank said in a filing. The lender's interest income also increased to Rs 2,994 crore from Rs 2,657 crore in the same quarter a year ago.

The bank's net interest income (NII) grew by 7 per cent to Rs 1,369 crore in the first quarter of the current financial year.

The gross Non-Performing Assets (NPAs) declined to 3.91 per cent of the gross advances by June 2024 from 5.77 per cent in the same quarter a year ago. The net NPA too declined to 0.76 per cent as against 1.39 per cent in the same period of the previous year.

The capital adequacy ratio of the bank improved to 15.07 per cent at the end of June compared to 14.83 per cent in the year-ago period.

The bank in a statement said that the Net Interest Margin (NIM) has improved by 9 basis points QoQ to 3.86 per cent from 3.77 per cent registered in Q4 of 2023-24.

Core operating profit of the Bank witnessed an increase of 13 per cent YoY to Rs 594.67 crore from Rs 528.05 crore, it said.

The Bank's Return on Assets (RoA) for the June quarter stood at 1.08 per cent as against 0.94 per cent recorded during Q1 of the last financial year, the bank added.

JK Bank MD and CEO said with improved bottom line, our performance in the first quarter reflects the resilience and strength of the Bank.

"The key financial metrics have shown notable improvements, reflecting healthy progress. And with our Return on Assets above 1 per cent, we have also maintained the NIM in the upper band of our market guidance, i.e., near 4 per cent at 3.86 per cent despite pressure on margins," he said.

The bank said its advances grew over 13 per cent YoY and stood at Rs 95,449.77 crore as against Rs 84,475.63 crore in the corresponding quarter a year ago.

The deposits also increased by 9 per cent to Rs 1,32,573.13 crore from Rs 1,21,297.49 crore recorded last year. During the quarter, the Bank's CASA Ratio stood at 49.77 per cent.

Commenting on the business growth, the bank MD said there is healthy growth in our advances and deposits, demonstrating the trust and loyalty of our customer base especially in our core operational geography.

He said however, on account of the increased outflows of Government funds witnessed usually during our first quarter, there is a temporary dip in CASA ratio this time but we are confident to maintain it above 50 per cent annually.

"And we have already sharpened our focus to augment our strong liability franchise," he added.

"We also foresee growth in business, coming from the developmental drive of massive infrastructure being put into place to meet the growing requirements of the increasing tourist inflow into J&K," he added.

"In terms of operational excellence, we are steadily emerging as a lean, agile and digitally driven financial institution," the MD and CEO said about the steady transformation of the bank.

"During the last many quarters, we have transformed the digital interface of the Bank and are on track to accomplish the goal of becoming 100 per cent digital not only in our services framework but also in our internal work processes."

"By the end of the current financial year, we are planning to digitally on-board our remaining products, thereby, opening up infinite possibilities for online journeys within the country's banking sector. The strategic objective is to become a bank for all generations," he added.

During the quarter, the Bank said its Capital Adequacy Ratio (BASEL III) has improved to 15.07 per cent as against 14.83 per cent recorded last year.

"With CRAR at above 15 per cent level, I think we are adequately capitalized to fund our future growth plans," the CEO said on the capital position of the bank.