Chairman and CEO Mushtaq Ahmad addressed the call.
Highlights of the call by Capital mkt:
Net Profit grew 11.02 % to Rs 321.29 crore for the quarter ended Dec, 2013 as compared to Rs 289.40 crore earned during the quarter ended Dec, 2012.
NIMs (Net Interest Margins) Ratio for the quarter ended Dec, 2013 at 3.97% (annualized) visāvis 4.07 % for the corresponding quarter of previous financial year.
The management said that this will increase in March 2014 quarter and will be around 4%+.
During the quarter Post tax Return on Assets stood at 1.88 % (annualized) compared to 1.87 %.
Post Tax Return on Average Net-Worth (annualized) for the quarter ended Dec, 2013 at 22.80 % compared to 24.35 % recorded for the corresponding quarter of last financial year.
The Cost of Deposits (Annualized) for the quarter ended Dec, 2013 stood at 6.94 % compared to 6.74 % recorded for the corresponding quarter of last financial year.
The Yield on Advances (annualized) for the quarter ended Dec, 2013 stood at 12.24% as compared to 12.60% for the quarter ended Dec, 2012.
Business per Employee and Net profit per Employee (annualized) were at Rs 11.36 crore and Rs 13.71 lakh respectively for the quarter ended Dec, 2013 compared to Rs 9.91 crore and Rs 12.37 lakh pertaining to the quarter ended Dec, 2012.
Gross and Net NPAās as percentages to Gross and Net Advances as on Dec, 2013 at 1.65% and 0.22% respectively compared to 1.61% and 0.14% a year ago.
NPA Coverage Ratio as on Dec, 2013 at 90.24% well above RBI stipulated norm of 70%.
Cost to Income Ratio stood at 39.94% for the quarter as compared to 36.50%.
Capital Adequacy Ratio (Basel III) stood at 13.01% as on Dec, 2013 well above RBI stipulated norm of 9%.
For the quarter interest earned grew 11.89% to Rs 1715.52 crore. Interest expenses grew faster by 13.835 to Rs 1068.93 crore. Thus NII grew 8.82% to Rs 646.59 crore.
The company had raised Rs 4500 crore bulk deposit at higher rate of 9-10% that is why interest expenses have gone up.
For the nine month Net Profit grew 15.76 % to Rs 931.87 crore as compared to Rs 805.02 crore earned during the nine months ended Dec, 2012.
NIMs (Net Interest Margins) Ratio for the nine months stood at 4.18 % (annualized) visāvis 3.93 % for the corresponding nine months of previous financial year.
Post tax Return on Assets stood at 1.88% (annualized) against 1.78 % for the corresponding period of the previous financial year
Post Tax Return on Average Net-Worth (annualized) for the nine months stood at 23.31% compared to 23.88%.
For the nine month the Cost of Deposits (Annualized) stood at 6.70% compared to 6.92%.
The Yield on Advances (annualized) for the nine months stood at 12.25% as compared to 12.61%.
Gross and Net NPAās as percentages to Gross and Net Advances as on Dec, 2013 stood at 1.65% and 0.22% respectively compared to 1.61% and 0.14% a year ago.
NPA Coverage Ratio as on Dec, 2013 at 90.24% well above RBI stipulated norm of 70%.
Cost to Income Ratio stood at 37.31% for the nine months as compared to 34.98%.
March 2014 quarter will be better than December 2013 quarter.
Restructured loan fell from Rs 1495 crore to Rs 1450 crore. This is because one account of a south based company (from oil and exploration sector) went into NPA for Rs 94 crore. Thus restructured book went down and Gross NPA went up.
The management feels that Interest income will rise substantially in Q4 and PAT will also grow impressively.
Out of the total loan book around 15% is to the infra sector.
GNPA stands at Rs 725 crore and expect that to fall by March 2014 quarter.
Profit margin for J&K is 6.5% and rest of India it is around 2.7%. Profit margins from rest of India has grown from 2% 2-3 years ago.
Going forward CASA ratio should go up to 41-42% from current 39%
Top 5 single borrower exposure are Food Corporation of India, NHPC, Tata group, Reliance group and Birla.
In March 2014 quarter the company hopes to open 30-40 branches. It has identified the places already.
Around 66% of the deposit comes from J&K state. This has grown more than 20%. Outside J&K it has grown 15%.
The NPA Coverage ratio of the Bank during the quarteris90.24%.
In spite of the economic distress the bank has reported growth. The bankās strategy to maintain a quality asset book has been fruitful so far.
The management feels that the results sound reasonably fine amid the stress in asset-quality of banks across the industry coupled with adverse macro-economic conditions persisting in the country. In such a scenario, its focus too has been more on maintaining quality of assets rather than raising the numbers.
With elections looming amid economic downturn, the management feels the going would get tougher for at least couple of quarters to come. Yet it feels confident to deliver growth around 15% besides preserving its key quality parameters.
Moving ahead with the policy of expansion, in the past three quarters it has opened 73 Business Units and commissioned 154 ATMs
Agriculture and handicrafts shall continue to be the bankās focus in lending within the state. However, amid shrinking industrial output across the country, the entrepreneurial and industrial activity within the state looks poised to pick up. Going forward, the Bank plans to lend aggressively to build its momentum within the state.
The bank does not wish to have more exposure to the power sector.
The bank can easily grow at 20-25% year after year.
March 2014 quarter to be much better than December 2013 quarter.