J&K Bank Q4 Net Profit Remained At Rs 250 crore

J&K Bank, the only bank in India which is majorly owned by a state government, posted muted set of results for the quarter ending March 31, 2014. The net profit of the bank for Q4FY14 came in at Rs 250 crore, which remains unchanged, if compared with the corresponding quarter last year. Although, net profit of the bank remained at the same level, the operating profit was down by 10.5% on yearly basis to Rs 481.44 crore for Q4FY14.

The operating profit was down due to a 46.8% drop in other income on yearly basis to Rs 111.1 crore for Q4FY14. The fall in the treasury income primarily led to such dismal performance of other income. Nonetheless, drastic fall in the provisions & contingencies helped the bank not transmitting similar loss at the net profit level. Provision & contingencies of the bank dropped by 66% to Rs 60.57 crore in the similar period. Despite such fall, the provision coverage ratio of the bank remained one of the best in the industry at 90.3% at the end of Q4FY14.

Net interest income (NII) of the bank saw a modest increase of 10.7% on yearly basis to Rs 701.18 crore.

The asset quality of the bank is one of the best in the sector; however, it saw some signs of stress in the quarter ended March 31, 2014. The gross non-performing assets (NPA) and net NPA of the bank increased by 8% and 5% to Rs 783 crore and Rs 101.99 crore respectively on sequential basis. The gross NPA ratio increased marginally by one basis point to 1.66% on quarterly basis, whereas net NPA remained flat at 0.22% in the same period.

The board has recommended a dividend of Rs 50 per share for the year ended March 31, 2014.

After the announcement of the financial performance, shares of the bank fell by 5.4% and are currently trading at Rs 1790, which is 0.7 times its book value.