J&K Bank’s gross NPAs down from 9.67% to 4.08% – CEO Baldev Prakash unveils key achievements at Srinagar press meet

7 May 2024

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SRINAGAR: Jammu and Kashmir Bank has successfully reduced its Non-Performing Assets (NPAs) from 9.67% to 4.08% gross NPA and 0.79% net NPAs.

Unveiling this and other performance indicators for the fiscal year 2023-24 during a press conference at the bank’s Corporate Headquarters in Srinagar, Managing Director and CEO Baldev Prakash shared key figures and insights, highlighting the bank’s journey marked by record-breaking profits and robust growth this year.

The bank also declared a dividend of ₹2.15 per share, something that has brought cheers to its shareholders.

Speaking about the financial metrics, Mr Baldev said that the bank achieved a net interest margin (NIM) of 3.92% and a return on assets (ROA) of 1.22%, showcasing its strong operating results.

As already reported by Ziraat Times, J&K Bank has achieved a remarkable net profit of ₹1,767 crore, representing a staggering 48% increase from the previous year’s figure of ₹1,197 crore.

J&K Bank’s unwavering commitment to excellence and prudent financial management positions it as a beacon of success in the banking sector.

This achievement, Mr Prakash emphasised, underscores the bank’s unwavering commitment to excellence and prudent financial management, positioning it as a beacon of success in the banking sector.

Expressing his gratitude to the board management and stakeholders, Prakash particularly acknowledged the support received in overcoming challenges related to asset quality, citing a significant reduction in Non-Performing Assets (NPA) from 9.67 per cent to 4.08 per cent gross NPA and 0.79 per cent net NPA. This transformation, he noted, was a result of concerted efforts and strategic initiatives aimed at enhancing asset quality and minimising risk.

Prakash also provided insights into the bank’s substantial growth in deposits and advances, painting a picture of robust financial expansion. Deposits reached an impressive Rs 13,47,75 crore, registering a substantial year-on-year growth of 10.4 per cent, while advances surpassed the one lakh crore rupee mark for the first time, totalling Rs1,00,17,78 crore and representing a notable 14 per cent year-on-year growth. Notably, 70 per cent of credit is deployed in the union territories of Jammu Kashmir and Ladakh, underscoring the bank’s regional focus and commitment to driving economic growth in its core operational geography.

Prakash said there were “governance concerns” at the Bank in past. He acknowledged the infusion of Rs 1000 crore by the government as a critical measure to ensure compliance with regulatory guidelines. He emphasised the importance of maintaining a sufficient capital adequacy ratio, stating, “That (Rs 1000 crore capital amount) was very very critical because the capital adequacy ratio of the bank has to be up to minimum expectations as per the regulatory guidelines.”

Responding to queries regarding the Bank’s scrutiny by the Anti-Corruption Bureau due to previous governance issues, Prakash reassured stakeholders of concrete actions taken to address these challenges. He affirmed, “We have taken very very concrete steps to ensure that there are no governance and compliance issues. The policies of the Bank are well defined and well institutionalised now and we expect that with the establishment of the state of art technology and as well as the best policies, we will be able to handle all these issues more effectively.”

Prakash and his officers admitted that the bank has lost more than ten per cent of the market share in the last few years. “We have improved our technology platforms and we are working to regain that,” the CMD said. He also admitted a marginal fall in the bank’s topline income and insisted part of the profits were driven by recoveries. However, he insisted that all recoveries were carried out strictly as per the regulatory restrictions.

Asked about the understaffing in the branches, Prakash said they have hired a consultancy and it will act upon its suggestions. The officers flanking Prakash said while the bank has the best CASA ratio, provisioning stands at the best in the market, but it is still unable to manage the higher cost-to-income ratio. This could be the reason why the bank will think seriously before going for new recruitments.