Srinagar, Jun 17 (KNS): Posting its highest quarterly profit since January-March quarter of FY 2013-
14, J&K Bank today capped its incredibly progressive performance by delivering Q4 profits of
Rs 315.75 Cr despite COVID-19 pandemic induced disruptions while clocking decent annual
profits of Rs 432.12 Cr for the Financial Year 2020-21.
The bank declared its Q4 and FY 2020-21 annual results today after the Bank’s Board of
Directors approved the numbers in a meeting held here at the bank’s Corporate Headquarters.
Highlights of Performance
In one of the sharpest turnarounds of financials in its history, J&K Bank’s Q-o-Q profit jumped
more than four times to Rs 315.75Crfor the fourth quarter of FY 2020-21 from Rs 65.94 Cr
recorded for the third quarter of the financial year. The bank’s operating income increased by
6% YoY to Rs 4489.77 Cr from Rs 4252.59 Cr recorded for the corresponding period last year.
The operating profit of the bank for the financial year is up by 6% YoY to Rs 1611.23 Cr as
against Rs 1525.05 Cr recorded on March 31, 2020, while as the Net Interest Income has
increased to Rs 3770.78 Cr from Rs 3706.67 Cr. The Net Interest Margin (NIM) for the
reviewed financial year is 3.64%.
Boosted by the contribution by the treasury operations bank’s other income increased from
Rs546 Cr in FY 19-20 to Rs719 Cr in FY 20-21 registering a YoY growth of 32%.
“It is really an outstanding turnaround in numbers amid the devastating impact of the second-
wave of COVID-19 pandemic across the country. Wehave successfully braved the challenges
with our steely resolve, prudent balance-sheet management and effective guidance from our
Directors-on-Board. The numbers especially of Q4 results are very encouraging and will
generate a long-term organisational momentum for the steady growth of business while
cementing our collective resolve to march ahead and implement the government’s vision of
self-reliant, entrepreneur-friendly and socially-inclusive economy”, commented the Bank’s
Chairman &Managing Director R K Chhibber on the occasion.
Increase in Provisioning
Creating sufficient provisioning buffer to strengthen its balance sheet further, the Bank’s
Provision Coverage Ratio for the reviewed quarter has improved to 81.97 % - one of the highest
in the industry - as against 78.59 % recorded during the corresponding period last year

Improved Asset Quality
Bank’s net NPA’s as percentage to net Advances ratio has significantly declined to 2.95 % from
3.48 % while as the Gross NPA ratio has reduced sharply to 9.67% from 10.97% recorded as on
March 31, 2020
Regarding the bank’s asset-quality, the CMD asserted, “It is because of the war-footing efforts
put in at all levels of operations by the staff soon after Honourable Supreme Court withdrew
its direction to banks to withhold the classification of accounts as NPAs. Notably, we were able
to restrict our slippages to below Rs 1000 Cr as against the proforma NPA figure of about Rs
4600 Cr disclosed in our Q3 results. Despite getting a short window of just 7 days post
revocation of earlier directions by the honorable Supreme Court, we successfully conformed
with the assertions and assurances given to the market.”
“However, remaining alert to any fresh slippages while making further necessary provisions,
we shall remain guided by prudence and long-term assessment of the current situation. In this
regard, directions have already been issued to all the operative levels for implementing
necessary corrective measures, including a more robust and proactive performance
monitoring system with a focus on maintenance of asset quality”, he added.
Growth in Business
Advances and deposits’ portfolios in the UT of J&K have increased by 15.8% and 11.4%
respectively despite economic slowdown across the country, while as Ladakh UT has witnessed
the growth of 15.9% in advances and 29.4% in deposits.
Overall, the advances have increased by almost 4% from Rs 64399 Cr to Rs 66842 Cr during
the year reviewed while as the deposits have shown a healthy growth of 10.50% from Rs 97788
Cr to Rs 108061 Cr.
The CASA Ratio of the bank during the reviewed quarter has improved to 56.84% as against
53.66% recorded as on March 31, 2020, whereas, the ratio stood at 58% for the UT of J&K and
71% for the Ladakh UT.
Regarding the business growth, the CMD said, “Keeping in view the market conditions
post Covid19, we have witnessed a decent growth of over 10% in deposits along with
modest increase of 4% in credit off-take mainly because bank has for the time being
deprioritized corporate lending in the rest of India. But overall we are well positioned to
gain momentum and follow our trajectory of growth in coming quarters.”

Better Capital Adequacy
The bank’s Capital Adequacy Ratio is at 12.20 %, which is well within the BASEL III norms, as
against 11.40 % recorded as on March 31, 2020, an increase of 80 bps YoY.

“The bank’s Board had already approved raising of capital by issue of equity shares through
preferential allotment to Government of Jammu & Kashmir, the promoter and majority
shareholder of the Bank, for an amount up to Rs 500 Cr. Now, the compensation committee
of the Board has also recommended the issuance and allotment of 7.5 crore equity shares of
face value Re.1/- each up to Rs.150 crore (including premium) in one or more tranches to
eligible employees of the Bank under the J&K Bank Employees Stock Purchase Scheme, 2021
(JKBESPS 2021). Besides, the process of raising capital under Tier-2, FPO/QIP is also at an
advanced stage. Amid the stress in economy induced by the second wave of COVID-19, the
capital mobilization will help us in furthering business growth and to ward off COVID related
stress in asset-quality of the bank while enhancing our capacity to lend to productive,
developing sectors of regional economy”, the CMD remarked.
Meanwhile, adapting to the real-time functioning of financial services sector and bring in an
element of agility in the operations of bank’s business, the bank has decided to conduct ‘Monthly
Business Performance Reviews’ of all its Zones to sharpen its focus on business and allied
processes to further improving its service delivery systems.(KNS)