Mumbai: State-owned lender Jammu and Kashmir Bank reported a 32% rise in its fourth-quarter net profit, which lagged analyst estimates because of higher tax provisions, a top official said on Monday.
The bank earned net profit of Rs598 million, up from Rs452.8 million a year earlier. A Reuters poll of analysts had forecast a net profit of Rs816.33 million.
“The bank has set aside Rs990 million for tax payments during the quarter, 77% higher than the year-ago period,” Chairman, Haseeb A Drabu said.
“The bank provided an additional Rs200 million towards exceptional tax liability this year, accounting for the sharp increase,” he said.
“These are tax liabilities of the past, of the previous year, that gets crystalised during the course of this year,” Drabu told Reuters from the bank’s headquarters at Srinagar.
The bank’s average yield on loans rose during the full year to 10.5% as compared to 8.5% last year. The average cost of deposits increased to 5.5% from 4.5% a year earlier.
“The whole strategy of shifting to Jannu and Kashmir has impacted the yield. Over the past year, the bank has focussed its business in the Himalayan region, which now constitutes about 40% of its advances and 58% of its deposits,” he said.
The bank is looking at a loan growth of 30-35% during the year, including 40% growth in Jammu and Kashmir and 20% in the rest of India.
Shares in the bank were trading 0.12% higher at Rs650 in the Mumbai market.