The Board of Directors of J&K Bank approved the Bank’s accounts for the quarter ended September, 2007 at its meeting held at New Delhi on October 27, 2007.

FINANCIAL RESULTS

HIGHLIGHTS

The Bank recorded a 30% rise in net profit on the back of significant rise in Interest Income on loans & advances and Other Income. The net profit for the quarter ended September 30, 2007 rose to Rs 107.80 crore from Rs. 82.95 Crore compared with a year ago period. For the first half of this fiscal, bank has reported a 31.44% rise in net profit at Rs.191.04 crore from Rs.145.34 crore.

The Loan Book as on September 30, 2007 stood at Rs.18102 crore up 29.12% from last year’s Rs.14020 crore. Due to the volume growth in Advances and improvement in yields, the interest income on advances went up significantly by 41.58% over the corresponding quarter of the pervious year. As on September 30, 2007 banks deposit base stood at Rs.25954 crore from Rs.20392 crore a year back registering an increase of 27.27%.

The CASA deposits grow to Rs.9137 crore from Rs.8387 crore a year back. The CASA Ratio has fallen to 35.21% due to higher mobilization of term deposits. Despite the increase in Interest expenses by 49.42%, attributed to rising cost of deposits, bank has been able to protect its margins due to the concurrent increase in the lending rates.

Operating Income (Net Interest Income + Other Income) was Rs.253.20 Crores for the quarter ended September 30, 2007 as against Rs.227.55 Crores for the quarter ended September 30, 2006 registering an increase of 11.27%. The Other Income of the Bank have registered a healthy growth of 62% from Rs.35.78 Cores for the quarter ended September 30, 2006 to Rs.58.08 Crores for the quarter ended September 30, 2007.The
Bank has changed its policy from the current fiscal to book government income which stood at Rs.6 crore for Q2 FY-08 on a quarterly basis as compared to yearly booking of
such income in the pervious financial year. The amortization on investments held in‘Held to Maturity Category’, which was classified under provisions and contingencies in the corresponding quarter ended September 30, 2006, have been adjusted against other income.

Operating Expenses moved up marginally from Rs.91.40 Crores for the quarter ended September 30, 2006 to Rs.103.40 Crores for the quarter ended September 30, 2007 on account of Salary Revision, additional provisioning towards the retirement benefits of employees as per the revised Accounting Standard AS-15 and on account of expenditure incurred on new Signages.

As a result of good recoveries and minimal slippages reported during the quarter, no additional provisioning was required to be made during the quarter on account of bad and doubtful debts and as a result the provision cover has marginally came down to 65.42% (68.70% a year back). The Bank has ended the 2nd quarter of the financial year with NPA at 0.91% compared to 0.98% as at end of immediately preceding quarter. Net NPAs have decreased from Rs 169.31 crores as on 30-06-2007 to Rs. 165.21 crores as on 30-09-2007.

The Capital Adequacy Ratio stands at 12.86% at the end of September 30, 2007 and Tier I capital amounted to 12.19%. Net Worth of the Bank stood at Rs. 2116.53 Crores as at end of September 2007 as compared to Rs. 1882.42 Crores a year earlier, a growth of 12.44% YoY. The Bank intends to augment its capital in the current financial year through proposed London Listed GDR Issue and Bank has already made preferential allotment to the State Govt of Jammu and Kashmir during the quarter in order to enable the State Govt. to retain its majority stake in the bank consequent upon the said GDR Issue.

RBI’s has recently approved an increase in the FII’s limit in the bank from 40% to 46.83%.

CLICK HERE FOR J&K BANK FINANCIAL RESULTS Q2-2007

CLCIK HERE FOR J&K BANK EARNINGS UPDATE Q2-2007

For more information, please contact:

Mr. Parvez Ahmed
Vice President/ Secretary
The Jammu & Kashmir Bank Ltd.
+91 194 248 1927/28
parvazahmad@jkbmail.com
parvez.ahd@gmail.com

Preeti Harkare / Deepa Fadnis

Adfactors PR Pvt Ltd,

+91 22 2281 3565,

preeti@adfactorspr.com /deepa.fadnis@adfactorspr.com