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Analyst Meet / AGM - Analyst Meet

Expects 25% growth in net profit and NIM to be maintained around 4% for FY2014

Jammu and Kashmir Bank

21-May-2013, 12:53
Jammu and Kashmir Bank conducted an analyst meet on 20 May 2013 to discuss the financial results for quarter and year ended March 2013 and prospects of the bank. Mustaq Ahmed, Chairman and CEO of the bank addressed the meet:
Highlights:

Bank has targeted the business growth of 20% to touch a volume of Rs 125000 crore by end March 2014.

The advances growth is expected to be 20%, while the deposit growth is projected at 17-18% that will be mainly driven by advances growth.

Bank has targeted the credit growth of 20% outside J&K state and strong 30% for J&K state for FY2014. Outside the J&K state, the credit growth would be driven by advance to government undertakings and big brand corporates.

As per the bank, J&K state has harnessed only 15% of the total identified hydel power generation capacity and looks at it as a huge credit expansion opportunity.

Under apple project, bank has extended credit to about 40000 apple fruit growers in J&K state with the outstanding advances of Rs 900 crore, where the NPA is only Rs 5 crore as at end March 2013. Bank proposes to increase the apple project customer base to 60000 in FY2014 and 2.5 lakh over next two-three years with the advance base of Rs 2000-2500 crore. J&K state has around 3 lakh apple fruit growers.

As per the bank, the ratio of net profit to business has to be above 1%. Bank has archived the net profit - business ratio of 1.02% for FY2013. To maintain the ratio, bank has targeted the 25% growth in net profit for FY2014.

Bank expects to maintain the ROA above 1.7% to 2.0%, while hopes to maintain the ROE steady at around 23% for FY2014.

On economic growth outlook front, bank expects the India's GDP growth at around 6% for FY2014 with the pick in economic activity in the second half of FY2014, while bank expects the economy of home state J&K to grow at higher pace of 7-7.5% for FY2014.

Bank added new 8 lakh CASA customers in FY2013 to touch a level of 60 lakh CASA customer base. Bank has targeted 20% growth in CASA deposit for FY2014 ahead of 17-18% growth in overall deposits, which will help to maintain the CASA ratio.

The NIM of the bank improved to 3.97% for FY2013 with higher NIM of 4.07% for second half of FY2013, while bank expects to maintain the NIM at around 4% for FY2014.

Currently, the advance book share of J&K state and outside J&K state stands at 40:60. Bank proposes to have balance between J&K state and outside J&K state at 50:50 over next two-three years.

Bank has the network of 689 branches and 613 ATMs at end March 2013, while bank proposes to add 100 new branches in FY2014.

Bank has made provision for wage revision at the rate of 15-20% for the period of November-March FY2013.

Bank expects the cost-to-income ratio to increase by about 3 percentages for next two-three years due to wage hike and improve later.