J&K Bank announced a robust 27 per cent increase in the net profit for the first quarter of the 2024-25 financial year, reaching Rs 415 crore compared to Rs 326 crore in the same period last year.
The bank reported a significant rise in total income, which climbed to Rs 3,188 crore in the first quarter of the current fiscal year, up from Rs 2,885 crore a year ago. Interest income also saw a notable increase, reaching Rs 2,994 crore compared to Rs 2,657 crore in the corresponding quarter of the previous year. The bank’s net interest income (NII) rose by 7 per cent to Rs 1,369 crore.
A notable improvement was seen in the bank’s asset quality. Gross Non-Performing Assets (NPAs) declined to 3.91 per cent of gross advances by June 2024, down from 5.77 per cent a year earlier. Similarly, net NPAs decreased to 0.76 per cent from 1.39 per cent in the same period last year. The capital adequacy ratio improved to 15.07 per cent at the end of June, compared to 14.83 per cent in the previous year.
The bank’s Net Interest Margin (NIM) also improved by 9 basis points quarter-on-quarter to 3.86 per cent from 3.77 per cent in the fourth quarter of 2023-24. Core operating profit witnessed a YoY increase of 13 per cent, rising to Rs 594.67 crore from Rs 528.05 crore. The Return on Assets (RoA) for the June quarter stood at 1.08 per cent, up from 0.94 per cent in the same quarter of the previous year.
JK Bank‘s MD and CEO attributed the improved financial performance to the bank’s resilience and strategic initiatives. “Our performance in the first quarter reflects the resilience and strength of the Bank,” he stated. “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.”
The bank reported a 13 per cent YoY growth in advances, reaching Rs 95,449.77 crore compared to Rs 84,475.63 crore in the corresponding quarter last year. Deposits also increased by 9 per cent, totalling Rs 1,32,573.13 crore, up from Rs 1,21,297.49 crore recorded last year. The bank’s CASA Ratio stood at 49.77 per cent for the quarter.
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Commenting on the business growth, the bank’s MD noted the healthy growth in advances and deposits, highlighting the trust and loyalty of the customer base, especially in the bank’s core operational geography. He acknowledged a temporary dip in the CASA ratio due to increased outflows of government funds but expressed confidence in maintaining it above 50 per cent annually.
The MD also emphasised the bank’s focus on operational excellence and digital transformation. “We are steadily emerging as a lean, agile, and digitally driven financial institution,” he said. “By the end of the current financial year, we are planning to digitally onboard our remaining products, opening up infinite possibilities for online journeys within the country’s banking sector. The strategic objective is to become a bank for all generations.”
Looking ahead, the MD highlighted the bank’s strong capital position with a Capital Adequacy Ratio (BASEL III) of 15.07 per cent. “With CRAR at above 15 per cent level, I think we are adequately capitalised to fund our future growth plans,” he stated, expressing optimism for the bank’s future growth and transformation initiatives.
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