Achievement of last five years a process of quiet transformation: bank chief

The Jammu and Kashmir Bank on Sunday announced that it had crossed the Rs.500-crore mark in its annual net profits by registering a highest ever profit of Rs.512.38 crore for the financial year 2010.

The profit has gone up by 25 per cent from Rs.409.84 crore that was recorded in the corresponding year.

The net profit for the quarter ended March 2010 increased by 53 per cent and stood at Rs.120.04 crore, compared to Rs.78.68 crore earned during the corresponding quarter in 2009.

The bank made the announcement during the review of financial results for the quarter and financial year ended March 2010 by its Board of Directors at a meeting here on Saturday. Chairman and chief executive of the bank Haseeb Drabu said at a press meet that the achievement of the last five years was a process of “quiet transformation.”

“After the consolidation phase of the last five years, today we are among the most stable and efficient banks in the country in terms of basics, business and returns. Now our focus would be on growth,” he said.

“The total business turnover has increased by 12 per cent YoY [Year Over Year] and moved up from Rs.53,935 crore to Rs.60,294 crore. In the next two years, we have given ourselves the target of achieving the total business of Rs.1 lakh crore besides a Rs.1,000 crore profit,” he said.

Elaborating on the steps the bank took in the last five years, he said: “Our approach was mainly inward-looking. We focused on consolidation by changing the composition of advances, like we increased our credit deployment in Jammu and Kashmir exponentially from Rs.1,200 crore to Rs.12,000 crore. We managed our liabilities well and restructured our lending in RoI [Return on Investment].”

The Operating Profit of the bank for the year ended March 2010 increased by 24 per cent YoY to Rs.958 crore from the Rs.774 crore earned during the previous financial year. The Operating Income (Net Interest Income + Other Income) for the current year was Rs.1,536 crore, against Rs.1,245 crore for the last fiscal, registering an increase of 23 per cent.

“These profits are driven by the substantial improvement in the bank's Fee Based Income [Other Income] during the current financial year, which is up by 70 per cent from Rs.245 crore to Rs.416 crore, the major contributor being the Treasury/Trading Income,” Mr. Drabu said, adding that the bank was expecting the business to grow to Rs.1 lakh crore by 2012.

“We have first been consolidating our business in the phase and are now trying to improve the growth in the second phase presently.”

On opening of branches in Pakistan occupied Kashmir, Mr. Drabu said the bank would like to operate elsewhere as well, “but this decision lies with the Central government. However, we would provide financial support to traders to carry out LoC trade to make it more regular.”

Mr. Drabu said the bank had set up over 300 CSE (Khidmat Centres) under the Information Technology programme.

“We are the only bank in the country to which Reserve Bank has given permission for setting up Khidmat Centres. We are going to set up more 800 such centres to facilitate easy lending of loans and other financial services to artisans and other customers. Now, artisans and unemployed youth get 100 per cent loans. We are financing 90 per cent and the government has already decided to provide 10 per cent seed money,” Mr. Drabu said.

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