The Hindu Business Line : J&K Bank Q3 net up 30%; to decide on interest rates in April

New Delhi, Feb. 1 J&K Bank is unlikely to go in for any interest rate cuts till April this year despite the recent moral suasion by the Reserve Bank of India Governor, Dr Y.V. Reddy, asking bank chairmen to look at moderation of deposit and lending rates.

“I will take a call on interest rates in April. I don’t see rates coming down in February and March. I don’t subscribe to the moral suasion of RBI. The playing field is iniquitous (with mutual funds) and the distortions created by public policy have to be removed,” Dr Haseeb Drabu, Chairman of J&K Bank, said.

Meanwhile, a sharp rise in trading income from government securities has helped J&K Bank report a 30.38 per cent increase in net profit for the quarter ended December 31, 2007 at Rs 109.16 crore as compared to net profit of Rs 83.89 crore recorded in the same period in the previous year.

Total operating income (net interest income + other income) of the bank for the period under review stood at Rs 271.82 crore (Rs 227.75 crore). Other income stood at Rs 70.48 crore (Rs 32.67 crore).

“We had a trading income of Rs 23 crore in the third quarter, representing a 380 per cent increase over the Rs 5 crore earlier. This 380 per cent increase is on a low base. But going forward, we want to get more aggressive on treasury income. We are building portfolio for this. In the first and second quarters of next fiscal, we will perhaps get better contribution from treasury,” Dr Drabu told Business Line.

J&K Bank also plans to augment its capital through the proposed GDR issue. The bank has already made allotment of 40,92,140 convertible warrants on preferential basis to the State Government of Jammu and Kashmir to enable it to retain majority stake in the bank after the GDR issue.

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