Jammu & Kashmir Bank (J&K Bank) has slipped into the red, reporting a standalone net loss of ₹294 crore for the fourth quarter ended March 31, 2020, against a net profit of ₹215 crore in the year-ago quarter.

The bank, which is majority owned by the Government of the Union Territory of J&K, had reported a standalone net profit of ₹50 crore in the quarter ended December 31, 2019.

For FY20, J&K Bank reported a standalone net loss of ₹1,139 crore, against a net profit of ₹465 crore in FY19.

Net interest income (difference between interest earned and interest expended) in Q4 increased 6 per cent year-on-year (YoY) to ₹987 crore (₹931 crore in the year-ago quarter). Other income, comprising commission/exchange, profit on sale of investments, recovery in written-off accounts and profit on exchange transactions, was sharply down 70 per cent YoY at ₹121 crore (₹404 crore).

Operating profit before provisions and contingencies was down 36 per cent at ₹382 crore (₹601 crore).

Loan loss provisions increased by 30 per cent YoY to ₹586 crore (₹450 crore).

As per the notes to accounts, J&K Bank extended the moratorium on advance accounts aggregating ₹10,290 crore, which were in the special mention account (SMA)/overdue category as on March 1, 2020. Further, the bank has extended the benefit of asset classification in advance accounts having outstanding of ₹2,948.54 crore and has made a provision of ₹147.50 crore (at the rate of 5 per cent) on these advances during the current quarter.

Gross non-performing assets (NPAs) declined to 10.97 per cent of gross advances as of March-end 2020, against 11.10 per cent as of December-end 2019.

Net NPAs position improved to 3.48 per cent of net advances as of March-end 2020, against 4.36 per cent as of December-end 2019.

As at March-end 2020, deposits were up 9 per cent YoY to ₹97,788 crore. Advances declined 3 per cent YoY to ₹64,399 crore.

During the financial year ended March 31, 2020, the Government of UT of J&K infused ₹500 crore capital in the bank. The bank allotted and issued about 15.65 crore equity shares of ₹1 each fully paid at an issue price of ₹31.93 (including premium of ₹30.93 per share).

The Government of UT of J&K's holding in the bank has increased to 68.18 per cent as on March 31, 2020 from 59.23 per cent as at December-end 2019.

Published on June 30, 2020

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