J&KBANKNSEQ2 FY 2023October 21, 2022

The Jammu & Kashmir Bank Limited

6,240words
149turns
7analyst exchanges
2executives
Management on call
Baldev Prakash
MD & CEO – J&K BANK ALONGWITH THE MANAGEMENT TEAM
Renish Bhuva
ICICI SECURITIES LIMITED
Key numbers — 40 extracted
12 million
observed in the UT in every sphere. The UT is witnessing an unprecedented growth phase with over 12 million tourists visiting J&K during the first nine months (Jan – Sep) of the year and the rush hour is c
Rs. 1100 crore
these challenges head on simultaneously. We augmented our capital (T1 & T2) by fresh infusion of Rs. 1100 crores and total plough -back of profit (Rs. 500 Crore) during last FY. We also switched over to the la
Rs. 500 Crore
nted our capital (T1 & T2) by fresh infusion of Rs. 1100 crores and total plough -back of profit (Rs. 500 Crore) during last FY. We also switched over to the latest version of CBS i.e. Finacle-10 in June 2022.
6%
our bottom- line. During our guidance for the current FY, we had envisaged a GNPA level of around 6% by the year-end which might have sounded overambitious at that time and also not corroborated by
8%
our Q1 numbers. But today I proudly inform you that the GNPA figure has come down well below the 8% mark – a feat achieved after seven (07) years. And we are not done yet, we are on course to deliv
Rs. 900 Crore
resolution process has gathered more steam with the activation of the Bad Bank (NARCL) – at above Rs. 900 Crore, our bank too has a significant share in the NPA pie being assigned to NARCL in the first phase.
9%
e numbers for Sep 2022 before taking your queries. The growth in Deposits and Advances has been 9% apiece on YoY basis while it is 3% and 4% respectively over the quarter. Overall business (Deposi
3%
ing your queries. The growth in Deposits and Advances has been 9% apiece on YoY basis while it is 3% and 4% respectively over the quarter. Overall business (Deposits plus Net Advances) has crossed R
4%
r queries. The growth in Deposits and Advances has been 9% apiece on YoY basis while it is 3% and 4% respectively over the quarter. Overall business (Deposits plus Net Advances) has crossed Rs. 1.
Rs. 1.90 Lakh crore
% and 4% respectively over the quarter. Overall business (Deposits plus Net Advances) has crossed Rs. 1.90 Lakh crore mark and on gross basis it is just shy of Rs. 2 lakh Crore. CASA, though slightly down is still n
Rs. 2 lakh Crore
sits plus Net Advances) has crossed Rs. 1.90 Lakh crore mark and on gross basis it is just shy of Rs. 2 lakh Crore. CASA, though slightly down is still near the 55% mark. The yield on Advances has significantly i
55%
d on gross basis it is just shy of Rs. 2 lakh Crore. CASA, though slightly down is still near the 55% mark. The yield on Advances has significantly improved to 9.01% for the quarter while the cost of
Guidance — 20 items
Baldev Prakash
opening
“During our guidance for the current FY, we had envisaged a GNPA level of around 6% by the year-end which might have sounded overambitious at that time and also not corroborated by our Q1 numbers.”
Baldev Prakash
opening
“With sustained improvements in all parameters, we anticipate a rating upgrade in the near future.”
Baldev Prakash
opening
“We have strived to add some cheer and further brighten the Deepawli celebrations of the stakeholders and expect the investor fraternity to take note of the steadily improving performance of the Bank.”
Baldev Prakash
opening
“We acknowledge your guidance, support and trust and we expect it to continue in the coming days.”
Manish Ostwal
qa
“Secondly, Sir, recovery from written-off accounts, what is the second half target?”
Shujaat Andrabi
qa
“So we don't expect there will be a need to go for write-offs in Q2.”
Baldev Prakash
qa
“So this will be around the same range only INR4,700 crores.”
Sonaal Kohli
qa
“So we had the board meeting today itself and being Friday also, the presentation will be on the website by evening today.”
Shujaat Andrabi
qa
“There has been some increase, but we are working on it, and it will be -- within a couple of days, it will be at the level of month-end.”
Sonaal Kohli
qa
“And sir, how -- when you start -- do you expect any hits there when the repayment cycle starts or you're not concerned about ECLGS book in a bit.”
Risks & concerns — 6 flagged
The major area of concern on the business front, as we perceived, was the asset quality followed by the requirement of growth capital.
— Baldev Prakash
And are you seeing an impact of it or when will you start seeing an impact of this book when the repayment cycle start?
— Sonaal Kohli
So we don't foresee any stress in the GECL accounts.
— Baldev Prakash
And sir, what is your total risk weighted assets as on 30th September?
— Sonaal Kohli
Total risk weighted assets are INR 74,115.
— Altaf Kira
And with the support of that low turnover report, we have started addressing this concern.
— Baldev Prakash
Q&A — 7 exchanges
Q
Thank you for the opportunity and congratulations to the entire team of Jammu & Kashmir Bank for delivering the very strong set of numbers and keeping the faith of investors for the coming quarters. My question on the sustainability of the certain metrics like declining asset quality trend and improving margins and you said in the quarter 4 call that, the loan book growth for the full year would be 15%. And in this, we have a loan growth of 9%, so do we revise that outlook or we are confident to achieve 15% growth for the year?
Baldev Prakash
Yes. Thank you, Manish. The first question is relating to NPA and the sustainability of the trend. After Finacle 10, we are leveraging the technology now. So every week, we are following-up the SMAs very effectively at all levels and similarly, the NPAs also, since all the old NPAs are fully provided, so now all type of actions including the SARFAESI and all recovery actions are on. So we are getting a good amount of recovery in the old accounts also and in the new accounts, we are containing them at SMA levels only. And since there is a good amount of response from the customers also, we are
Q
Thanking you for this opportunity. Sir my first query, what is it while trying to review the presentation we couldn’t find any in the last at least 15 minutes ago.
Baldev Prakash
Can you repeat Sonaal, we are not able to hear you clearly. This is Sonaal Kohli, I wanted to check, would you be releasing the presentation this quarter. You normally come with a presentation, but we couldn't find any here on IR section on the company website so far? Mohammad Ishaq Bhat : Sonaal, actually, the Board meeting was held this day only. And usually what we used to do, we used to hold the Board meeting and then the call was actually held after that, the next day or a couple of days after the board meeting. So we had the board meeting today itself and being Friday also, the presentat
Q
Good Afternoon Sir, in Note No. 25, you have mentioned other assets of the bank includes INR 4,339.23 crores as pension dues from government of J&K and Ladakh, what is this Sir? I’m not sure from where you’re are getting this money?
Baldev Prakash
You see the Bank is actually designated as an Agency Bank by Reserve Bank of India for the UT of Ladakh and UT of J&K. And under that assignment, we handle the government business of the 2 UTs. And this pension is also a part of the government business only that we have to make the disbursements and then the reimbursement is sought from them. So this amount remains there for some time, when the reimbursement come and it get off-set, but this a monthly phenomenon. Every month, we disburse the pension and the reimbursements are received from the government because of this arrangements, because w
Q
So can you just tell me that from which all sectors are you seeing a good credit growth coming during the quarter?
Baldev Prakash
Yes. So Shivam, we have a growth of – Ashutosh Sareen Shivam, I’m Ashutosh, I’m Credit Head. So we are seeing good credit growth coming in the retail advances segments, particularly MSME and housing loan segments, where we have grown in in housing loan, you would be happy to know that we have grown by 18% in the last six months. And also, we have strategy to going forward from the migration to the digital lending platform from manual mode.. So the growth is coming basically from retail sector. And anything on the corporate side? Yes. Corporate, we -- as we started working on it, and there is a
Q
Sir, what is the outstanding number on our ECLGS book as on 30th September?
Baldev Prakash
Abhishek, you have to speak a little louder, please. Sir, what would be the outstanding number on our ECLGS book as on 30th September? Which book? ECLGS. Yes, you are talking about GECL. Yes. Okay. So I think…INR 1,700 crores. INR 1,700 crores on ECLGS book? Yes. We call it the GECL. So I'm asking about ECLGS, Emergency Credit Line Guarantee Scheme. Yes. And Sir, what would be the overlap between SMA-1 and 2 in a restructured book? The restructured book, our restructure book is INR 3,100 crores as on 30th September. Overlap between SMA-1 and 2 and restructure book. SMA-1 and 2 and restructured
Q
Sir, what kind of hiring plans do we have this year? And what kind of aging provisions do you meant to have this year and next year?
Baldev Prakash
Sonaal, can you repeat the question, please? Sir, what kind of hiring plans do we have this year and next year? Yes. So as of now, we are going for only the specialized hiring. No general hiring because we had a good number of people inducted two years before, one and a half-year before. So as of now, for the general routine functioning, we don't need further people. We need only for specialized sectors like our IT or other thing, we'll always plan for small-small hiring, not much. Sir, the wage revision, which has been planned in all other banks, we would also be implementing this year and wo
Q
Thank you very much and all the best blessings and greeting for the festival of Diwali. Thank you so much.
Management
Speaking time
Baldev Prakash
49
Sonaal Kohli
39
Shujaat Andrabi
19
Moderator
9
Abhishek Tandon
8
Shivam
7
Manish Ostwal
5
Nathmal Modi
5
Renish Bhuva
1
Ishaq Bhat
1
Opening remarks
Renish Bhuva
Yes. Thanks. Thanks, Lizann. Hello and good afternoon, everyone and welcome to the Jammu & Kashmir Bank Q2 FY '23 Earnings Conference Call. From the management team, we have with us today Mr. Baldev Prakash, Managing Director and CEO and along with him there is the entire senior management team is also there. We will start with the opening remarks and then open the call for Q&A. I would like to thank the management team for giving us the opportunity to host the Q2 FY '23 Earnings Conference Call. I will now hand over the call to Mr. Baldev Sir for the opening remarks. Over to you, sir.
Baldev Prakash
A Very Good Afternoon, Greetings for the festival of lights Deepawali and Warm Welcome to all the participants. As you all know that the global pressures are on play and the growth forecasts are being moderated with some experts even predicting a recessionary period. There seems no immediate end to the Russia-Ukraine conflict and the inflationary pressures are not abating, incessant rate hikes notwithstanding with more being anticipated. We have also seen a lot of volatility in the capital market and exchange rates. But despite the adverse headwinds, there has been good credit demand in the country and the financial services industry is seemingly doing well. J&K, which gets very little coverage in the national media and that too usually for not so good reasons, generally remains a partially unknown and mysterious territory. However, post the reorganization, the UT is getting a lot of attention from the union government with development of infrastructure especially connectivity to make
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