The Board of Directors of J&K Bank aproved the Bank’s accounts for the quarter ended June 30, 2008 at its meeting held in Delhi on July 30, 2008.

The Bank recorded a net profit of Rs 94.56 crore in Q1 FY2008-09, an increase of 14% over the corresponding period of the previous year. The bank’s operating profits were up by 38% at Rs 181.50 crore for the first quarter ended 30th June 2008 as compared with Q1 of 2007-08.

The Net Interest Margins of the Bank have improved to 3.09% for the quarter ended June 30, 2008 as compared to 2.90% for the corresponding quarter of the last fiscal. Breaking away from Industry trend, cost of deposits has come down to 5.71% for the quarter ended 30th June 2008 as compared to 5.93% for Q1 of 2007-08.The bank has been able to improve its margins due to the increase in low cost deposits and concurrent increase in the lending rates.

The total business turnover increased to Rs 48,579 crore in Q1 FY09, an increase of 15% over the corresponding period of the previous year. The Loan Book as on June 30, 2008 stood at Rs.20075 crore up 15.70% from last year’s Rs.17351 crore. Due to the volume growth in Advances and improvement in yields from 10.23% for Q1FY 2007-08 to 10.37% for the current quarter, the interest income on advances went up by 15% over the corresponding period of pervious year. As on June 30, 2008 banks deposit base stood at Rs.28504 crore from Rs.24744 crore a year back registering an increase of 15.2%. There has been significant accretion of more than Rs. 2200 cr to the bank, in its low cost deposits portfolio during this period, which has resulted in improving CASA ratio to 38.88% as against 35.83% of corresponding period of the previous fiscal.

Operating Income (Net Interest Income + Other Income) was Rs. 291.13 crore for the quarter ended June 30, 2008 as against Rs. 225.43 crore for the quarter ended June 30, 2007 registering an increase of 29.14%. Other Income of the Bank has increased from Rs.35.82 crore for the quarter ended June, 2007 to Rs. 64.88 crore for the quarter ended June 30, 2008, registering an increase of 81.13%. As a result of steps taken by the Bank to increase other income, the ratio of other income to total income of the Bank has increased to 9.06% from 5.86% a year ago.

There has been improved productivity during the period under review. Business per employee and profit per employee has increased to Rs. 644 lakh and Rs. 5.01 lakh respectively. Business per Branch and profit per Branch has increased to Rs. 94.70 crore and Rs. 73.73 lakh respectively. The cost to income ratio has decreased to 37.66% from 41.81%.

The Capital Adequacy Ratio stands at 12.20% at the end of June 30, 2008 out of which Tier I capital amounted to 11.59%. Net worth of the Bank as on 30th June, 2008 stood at Rs. 2403.48 crore as compared to Rs. 2091.97 crore as on 30th June, 2007.

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