It had a consolidated net profit of Rs 21.15 crore in the year-ago period. The bank had posted a net loss of Rs 293.82 crore in the quarter ended March 2020.
In the June quarter, total income fell to Rs 2,160.51 crore from Rs 2,257.42 crore in the same period a year ago, according to a regulatory filing.
On a standalone basis, the bank’s net profit in the first quarter of the current fiscal stood at Rs 6.50 crore. This is a decline of 70 per cent from a net profit of Rs 21.87 crore reported in the year-ago period.
Standalone total income stood at Rs 2,157.94 crore in the latest June quarter as against Rs 2,256.25 crore in the same period a year ago.
The lender’s gross non-performing assets rose to 10.73 per cent of the gross advances as on June 30, 2020. In the same period a year ago, it was 8.48 per cent. However, net NPAs (Non-Performing Assets) fell to 3.05 per cent from 4.36 per cent.
The overall provisioning and contingencies for June quarter was down at Rs 266.37 crore as against Rs 293.21 crore in year ago quarter.
The bank said that an interest amount to Rs 39.74 lakh for the period from November 3, 2019 to May 4, 2020 on Tier-II perpetual bonds to the tune of Rs 11.67 crore issued to J&K Grameen Bank has not been booked as income. This is due to the CRAR (Capital to Risk-Weighted Assets Ratio) of the associate bank falling below the minimum regulatory requirement prescribed by NABARD/ RBI.
The interest is non-cumulative in nature, it added.
J&K Grameen Bank is an associate of J&K Bank.
As per the regulatory norms, Regional Rural Banks (RRBs) are required to maintain a minimum CRAR of 9 per cent on an ongoing basis, consisting of both Tier 1 and Tier 2 capital.
On the COVID-19 impact, J&K Bank said that despite the challenges and present conditions, there would not be any significant impact on the bank’s results and going concern assumptions.
During the quarter ended June, the bank made further COVID-19-related provision of Rs 147.50 crore (cumulative provision of Rs 295 crore in terms of RBI guidelines).
“We have focused on strengthening our balance sheet further and I feel our (June) quarterly numbers are quite encouraging despite disruption due to the pandemic-hit scenario,” the bank’s Chairman and Managing Director R K Chhibber said.
“Having higher Provision Coverage Ratio (PCR) above 80 per cent is a strong indicator of the fact that the asset quality issues have been suitably taken care of and adequately provided for to focus on the future business and to improve the profitability of the bank. That is why we see our Q1 profit more indicative of our envisaged trajectory than an achievement in numbers,” Chhibber noted.