J&K Bank eyes 20% credit growth in FY14
Mumbai: The Jammu and Kashmir Bank is targeting a credit growth of 20 percent next fiscal and will gradually be increasing the share of advances in its home state, a top official has said.
"We will grow our overall credit by 20 percent and deposits by around 16-17 percent in FY14," the Srinagar headquartered public sector bank's Chairman and Chief Executive Mushtaq Ahmad said here.
Lending in Jammu and Kashmir, which accounts for a little over 40 percent of the book at present, will grow by 25 percent while the same in rest of India will grow slower, he said.
"We wish to go back to our older model of equally spreading of the asset book between J&K and outside the state. This went down due to some regulatory changes and we shall get it back to 50:50," he said.
The bank will be surpassing its target of Rs 1,000 crore net profit in FY13, having already achieved Rs 805 crore in the first three quarters, Ahmad said, declining to quantify the incremental profits.
It will also easily meet the guidance of taking the total balance sheet size to over Rs 100,000 crore by the end of the fiscal, having already touched the Rs 93,000 crore mark, he said.
The bank, majority owned by the state government of Jammu and Kashmir, is witnessing a good demand driven by the return of normalcy in the north Indian state, Ahmad said, adding that the tourism activity and the stress on the infrastructure sector helps the system.
On the entry of new banks in J&K state, he said it is a welcome sign and pointed out that his bank's performance on a majority of the indicators is better than the other lenders' experiences in J&K.
The bank's net interest margin widened to 4.07 percent mark for the third quarter ended December 31, 2012 on its ability to pass on the increase in cost of funds to the borrowers and Ahmad said he would be happy if the number comes in the 3.8 to 4 percent bracket going ahead.
Its branch network stood at 667 as of December and will touch the 725 mark by the end of the fiscal.
"We have always had 80-85 percent of the branches in J&K and this will continue," he said, adding that the total will touch 1,000 in two years.
Apart from that, it may also approach the Reserve Bank for having a presence in Dubai and London in the next two years, he said, noting that the thought is at a very preliminary stage.
It will not require any capital infusion on either the Tier-I and Tier-II front in the next fiscal as its total capital adequacy stood at a comfortable level of over 13.82 percent in December 2012, he said.