Jammu and Kashmir Bank’s first-quarter earnings decline as higher provisions offset improvements elsewhere, leading to a sharp fall in its share price. The bank reports consolidated net profit of Rs 424 crore, down about 12.6% from Rs 485 crore in the year-ago quarter. Multiple reports attribute the profit drop to substantially higher provisions, with the bank making Rs 84 crore of provisions compared with Rs 15 crore a year earlier. Analysts and investors also react to other profitability signals, including a compressed net interest margin of 3.28% during the quarter. The bank posts net interest income of Rs 1,497 crore, up around 2% year-on-year, and reports that pre-provision operating profit rises to Rs 703 crore. A net positive impact from a Rs 56 crore gain linked to a change in accounting policy effective April 1 is mentioned. Despite weaker earnings, asset quality shows improvement: gross non-performing assets fall to 2.4% from 3.5%, and the net NPA ratio stands at 0.60%. Shares fall nearly 13% on the results, with the bank also citing selective corporate lending and lower yields in a changing interest-rate environment.
J&K Bank Q1 profit falls 13% as higher provisions weigh on earnings; shares drop
Jammu and Kashmir Bank’s first-quarter earnings decline as higher provisions offset improvements elsewhere, leading to a sharp fall in its share price. The bank reports consolidated net profit of Rs 4...
- Jammu & Kashmir Bank reports consolidated net profit of Rs 424 crore for the quarter, down about 12.6% from Rs 485 crore a year earlier.
- The bank’s provisions rise to Rs 84 crore from Rs 15 crore, cited as a key driver of lower profit.
- Net interest margin for the quarter is 3.28%; net interest income is about Rs 1,497 crore.
- Share price falls by nearly 13% on the results, with BSE quoted at around Rs 154.6.
- Asset quality improves, with gross NPA at 2.4% (from 3.5%) and net NPA at 0.60%.
Jammu and Kashmir Bank reported a 12.6% drop in first quarter net profit at Rs 424 crore against Rs 485 crore in the year-ago period, on account of higher provisions, prompting a near 13% plunge in share price.The fall in net profit was despite a Rs 56 crore gain due to change in accounting policy effective April 1, according to the bank's regulatory filing to stock exchanges.The net interest margin for the quarter compressed to 3.28%. Net interest Income rose 2% at Rs 1497 crore.The share price nosedived 12.8% to Rs 154.6 on BSE, reacting to the pressure on profitability.The pre-provision operating profit for the quarter stood 4.5% higher at Rs 703 crore against Rs 673 crore earlier. The bank made a higher provision of Rs 84 crore against Rs 15 crore.Its asset quality meanwhile improved with gross non-performing assets ratio falling to 2.4% at the end of June from 3.5% a year prior. Net non-performing asset ratio was at 0.60%.Managing director Amitava Chatterjee said that the bank chose to support business momentum with selective corporate lending at lower yields in a changing operating environment which saw a rise in bond yields shifting corporates' focus to bank borrowing."This is partly on account of a tactical response to the prevailing market opportunities and economic conditions, wherein we exhibited a conscious preference for selective lending to well-rated corporates with sound fundamentals. That said, the strategic positioning of the bank as a retail-focused bank remains unchanged," Chatterjee said in a post-earnings analyst call.The bank's advances grew by 25% year-on-year to Rs 1.31 lakh crore at the end of June while yield on advances for the quarter under review stood lower at 8.56% against 9.35% for the corresponding period last year.Its deposits increased by 17% year-on-year to Rs 1.73 lakh crore.
3 hours agoThe Jammu & Kashmir Bank saw its consolidated net profit rise 12.6% to Rs 424 crore.
9 hours ago
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