Results - Analysis
Jammu and Kashmir Bank As on : 22-Jan-25  08:55

J&K Bank has reported 26% growth in net profit at Rs 531.51 crore for the quarter ended December 2024 (Q3FY2025). The bank has posted healthy 18% growth in net interest income (NII), while the core fee income of the bank improved 2% in Q3FY2025. The Net Interest Margin (NIM) of the bank improved to 4.04% in Q3FY2025 compared to 3.83% in the corresponding quarter of previous year.

On business front, the bank as has posted 8% growth in business with 6% rise in loan book. The asset quality of the bank has been impacted due to rise fresh slippages of loans in Q3FY2025. Bank has witnessed reduction in the credit to deposit ratio to 70.3% at end December 2024 from 72.8% at end December 2023. CASA ratio of the bank has declined to 48.2% at end December 2024 from 50.6% at end December 2023.

Asset quality shows pressure: The bank has witnessed pressure on asset quality on account of rise in fresh slippages of loans in Q3FY2025.

The fresh slippages of loans rose to Rs 322 crore in Q3FY2025 compared with 256 crore in previous quarter and Rs 278 crore in the corresponding quarter last year.

The recoveries of NPAs stood at Rs 102.58 crore, upgradations at Rs 87.52 crore and the write-off of loans was at Rs 6.64 crore in Q3FY2025.

The standard restructured loan book (net of provisions) of the bank declined to Rs 582 crore end December 2024 compared to Rs 674 crore a quarter ago.

Provision coverage ratio was steady at 89.67% at end December 2024 compared to 90.54% a quarter ago and 91.61% a year ago.

The capital adequacy ratio of the bank stood at 15.1% with Tier I ratio at 12.7% at end December 2024.

The risk weighted assets of the bank has increased 6% YoY to Rs 95758 crore end December 2024,

Asset Quality Indicators: J & K Bank
'	Dec/24	Sep/24	Jun/24	Mar/24	Dec/23	Variation
						QoQ	YTD	YoY
Gross NPA (Rs Crore)	4041.04	3916.26	3857.59	3956.19	4526.48	3	2	-11
Net NPA (Rs Crore)	898.08	813.39	727.58	736.85	740.83	10	22	21
% Gross NPA	4.08	3.95	3.91	4.08	4.84	13	0	-76
% Net NPA	0.94	0.85	0.76	0.79	0.83	9	15	11
% PCR	89.67	90.54	91.57	91.58	91.61	-87	-191	-194
% CRAR - Basel III	15.09	14.99	15.07	15.33	14.18	10	-24	91
% CRAR - Tier I - Basel III	12.71	12.70	12.81	13.09	11.74	1	-38	97
Variation in basis points for figures given in percentages and in % for figures in Rs crore

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Business Highlights:

Moderate business growth: The business of the bank has increased 8% YoY to Rs 240080 crore end December 2024, driven by 6% rise in advances to Rs 99133 crore. Deposits increased 10% to Rs 140947 crore at end December 2024.

CASA deposits ratio ease: The CASA deposits of the bank increased 4% YoY to Rs 67887 crore at end December 2024. The current account deposits increased 7% to Rs 14377 crore, while saving account deposits rose 4% to Rs 53511 crore end December 2024. The CASA ratio declined to 48.2% at end December 2024 compared to 50.6% at end December 2023, while declined from 48.6% a quarter ago. The term deposits have increased 15% to Rs 73060 crore end December 2024.

Double digit retail loan growth: Advances growth was driven by retail loans rising 10% YoY to Rs 39734 crore at end December 2024, while credit to agriculture increased 10% to Rs 9423 crore and MSME 4% to Rs 20924 crore at end December 2024. The corporate credit rose at moderate pace of 1% to Rs 29053 crore end December 2024.

Investment book of the bank jumped 28% YoY to Rs 40524 crore at end December 2024. The SLR book moved up 13% to Rs 32096 crore, while non SLR book surged 176% to Rs 8428 crore at end December 2024. The AFS book jumped 235% to Rs 14166 crore, while HTM book declined 5% to Rs 25820 crore at end December 2024. The duration of the overall investment portfolio stood at 3.09 years and AFS portfolio at 1.93 years end December 2024.

Margins improve: The bank has showed -6 bps YoY dip in cost of deposits to 4.76%, while yield on advances fell -3 bps YoY to 9.75% in Q3FY2025. NIM has improved 21 bps YoY and 14 bps qoq to 4.04% in Q3FY2025.

Branch expansion: The bank has added 4 branches and reduced 1 ATMs in Q3FY2025, taking overall tally to 1012 branches and 1423 ATM`s end December 2024.

Book value of the bank stood at Rs 114.1 per share at end December 2024, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 105.4 per share at end December 2024.

Quarterly Performance

NII rises as NIM improves: Bank has recorded 11% increase in the interest earned at Rs 3206.08 crore, while interest expenses increased 6% to Rs 1697.40 crore in Q3FY2025. NII improved 18% to Rs 1508.68 crore in the quarter ended December 2024.

Healthy growth in the other income: Bank has posted 2% growth in core fee income to Rs 57 crore, while the recoveries and other income jumped 17% to Rs 131 crore and the treasury income surged 281% to Rs 54 crore, leading to 33% jump in the overall non-interest income to Rs 242.32 crore in the quarter ended December 2024.

Expenses ratio improves: The operating expenses of the bank increased 10% to Rs 1002.89 crore, as other expenses moved up 9% to Rs 301.68 crore, while employee expenses increased 10% to Rs 701.21 crore in Q3FY2025. Cost to income ratio improved to 57.3% in Q3FY2025 compared with 62.4% in Q3FY2024, helping the Operating Profit to increase 36% to Rs 748.11 crore.

Provisions and contingencies: The bank created loan loss provisions of Rs 22.76 crore, while the bank has written back investment provisions of Rs 29.21 crore and standard asset provisions of Rs 5.04 crore. The other provisions were at Rs 1.69 crore. There was overall write back of provisions of Rs 9.80 crore in Q3FY2025 in addition to Rs 9.43 crore in Q3FY2024.

Effective tax rate rose to 29.9% in Q3FY2025 from 24.8% in Q3FY2024. Net Profit increased 26% YoY to Rs 531.51 crore during quarter ended December 2024.

Financial Performance 9MFY2025:

Bank has posted 33% increase in net profit to Rs 1497.92 crore in the nine months ended December 2024 (9MFY2025). The net interest income increased 11% to Rs 4313.83 crore, while non-interest income moved up 22% to Rs 732.50 crore, pushing up net total income by 12% to Rs 5046.33 crore in 9MFY2025. The operating expenses rose 1% to Rs 2916.56 crore, while provision and contingencies dipped 91% to Rs 5.25 crore, allowing profit before tax to increase 37% to Rs 2124.52 crore in 9MFY2025. The cost-to-income ratio improved to 57.8% in 9MFY2025 compared to 64.1% in 9MFY2024. An effective tax rate increased to 29.5% in 9MFY2025 compared to 27.5% in 9MFY2024. The net profit has increased 33% to Rs 1497.92 crore in 9MFY2025.

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J & K Bank: Results
Particulars	2412 (3)	2312 (3)	Var %	2412 (9)	2312 (9)	Var %	2403 (12)	2303 (12)	Var %
Interest Earned	3206.08	2880.96	11	9324.01	8302.19	12	11212.37	9355.11	20
Interest Expended	1697.40	1600.52	6	5010.18	4404.62	14	6008.68	4609.83	30
Net Interest Income	1508.68	1280.44	18	4313.83	3897.57	11	5203.69	4745.28	10
Other Income	242.32	182.34	33	732.50	600.92	22	825.48	756.81	9
Net Total Income	1751.00	1462.78	20	5046.33	4498.49	12	6029.17	5502.09	10
Operating Expenses	1002.89	912.25	10	2916.56	2885.44	1	3752.29	3643.60	3
Operating Profits	748.11	550.53	36	2129.77	1613.05	32	2276.88	1858.49	23
Provisions & Contingencies	-9.80	-9.43	4	5.25	57.36	-91	-107.69	74.13	LP
Profit Before Tax	757.91	559.96	35	2124.52	1555.69	37	2384.57	1784.36	34
Provision for tax	226.40	138.88	63	626.60	427.09	47	617.30	586.98	5
PAT	531.51	421.08	26	1497.92	1128.60	33	1767.27	1197.38	48
EPS*(Rs)	19.3	15.3	'	18.1	13.7	'	16.0	10.9	'
Adj BV (Rs)	105.4	88.1	'	105.4	88.1	'	92.2	69.9	'
* Annualized on current equity of Rs 110.13 crore. Face Value: Rs 1, Figures in Rs crore PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

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