Jammu & Kashmir Bank Q2 profit rises 10.6% to Rs 546.4 crore

Jammu & Kashmir Bank reported a 10.6% year-on-year increase in second-quarter net profit to Rs 546.4 crore on Thursday, October 22, according to Economic Times Markets. Profit stood at Rs 494.1 crore in the corresponding quarter a year earlier.

Pre-provision operating profit grew faster, rising 26.7% to Rs 789.1 crore from Rs 622.6 crore. However, a provision charge of Rs 72.3 crore, compared with a Rs 10.9 crore write-back a year earlier, limited the increase in bottom-line earnings.

Interest earnings rise, other income doubles

Net interest income increased 5% year-on-year to Rs 1,502 crore, while other income doubled to Rs 314.9 crore. The earnings gains supported the bank’s higher operating profit before provisions.

The distinction between a provision charge and a write-back matters for the profit comparison: the current quarter carried an expense, whereas the year-earlier period benefited from a reversal of provisions.

Bad-loan ratios improve as lending expands

The gross non-performing assets ratio fell 109 basis points year-on-year to 2.23% at the end of September. The net NPA ratio also improved, declining to 0.51% from 0.76% a year earlier.

Provision coverage increased to 91.76%, compared with 90.53% three months earlier. That comparison is quarter-on-quarter, unlike the annual comparisons for the bad-loan ratios.

Gross advances rose 23.7% year-on-year to Rs 1.34 lakh crore at the end of the reporting period. Total deposits increased 16.3% to Rs 1.77 lakh crore, leaving loan growth ahead of deposit growth.