The Jammu & Kashmir Bank has set its sights on achieving two milestones in the current fiscal. It aims to clock a total business of Rs 1 lakh crore and earn a net profit of Rs 1,000 crore, said a top bank official.
In the past fiscal, the 74-year-old private sector bank's total business (deposits and advances) grew by 22 per cent from Rs 70,864 crore to Rs 86,419 crore. Net profit was up 30.57 per cent to Rs 803 crore in the fiscal (Rs 615 crore in fiscal 2011).
According to Mr Mushtaq Ahmed, Chairman and Chief Executive Officer of the Bank, retail lending would be a thrust area for the bank. The bank's home, Jammu & Kashmir, is a rich source of low cost current account and savings accounts (CASA) and provides opportunities for deployment of funds towards meeting priority sector lending targets.
Currently, the bank sources 70 per cent of its deposits from J&K. Overall, CASA deposits were steady at 41 per cent of the total deposits of 53,342 crore as at March-end.
When it comes to loans, non-home States account for 63 per cent of the total of Rs 33,078 crore.
In the next few years, the bank's loan exposure will be equally divided between J&K and the rest of the country. Loan schemes targeted at orchard growers, handicrafts, and micro-, small and medium enterprises in J&K will help the bank grow its loan book in the State, Mr Ahmed said.
“In J&K we enjoy better margins. We have a very strong CASA base. Out of the total deposits mobilised from J&K, 50 per cent is CASA.
“So, there is a sense to mobilise deposits in J&K State and first deploy them locally. But the ticket size in the State is smaller. Hence, we deploy the surplus with large corporates and strong public sector undertakings,” said Mr Ahmed. The J&K bank chief said the endeavour will be to maintain the net interest margin in the 3.5-4 per cent range in this fiscal. As on March-end, the margin stood at 3.84 per cent, against 3.69 per cent as on March-end last year.
The bank plans to add 100 branches in the current fiscal to its bank network of 600 branches.
Mr Ahmed said, till September-end, he does not see any further rate cuts by the Reserve Bank of India. High inflation, volatile crude and commodity prices will constrain the Reserve Bank of India from effecting any further rate cuts.