J&K Bank Investor Brief Oct 2024 PDF

Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected]...

Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat Ref:-JKB/BS/F3652/2024/204 Date: 25th October, 2024 National Stock Exchange of India Limited The BSE Limited Exchange Plaza 5th Floor Phiroze Jeejeebhoy Towers Plot No. C/1 G-Block Dalal Street Bandra Kurla Complex Mumbai – 400 001 Bandra (E) Mumbai – 400 051 Scrip Code:532209 Symbol: J&KBANK Sub:- Presentation and Audio of Conference Call held on October 25, 2024 Dear Sirs, Further to our letter No. JKB/BS/F3652/2024/196 dated October 18, 2024 and pursuant to Regulation 30 and 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please be informed that the audio recording of conference call with analysts and investors in connection with the Reviewed Financial Results of the Bank for the Quarter and Half Year ended September 30, 2024 can be accessed at https://www.jkbank.com/investor/analystInteraction/investorConferenceCalls.php Further, please find also enclosed the investor presentation and opening remarks of conference call by MD & CEO of the Bank with the analysts and investors. The same can also be accessed at https://www.jkbank.com/investor/analystInteraction/investorAnalystInteractionSessions.php This is for your information and appropriate dissemination. Thanking you Yours faithfully For Jammu and Kashmir Bank Limited Digitally signed by MOHAMMAD SHAFI MIR MOHAMMA DN: c=IN, postalCode=191131, st=JAMMU AND KASHMIR, street=- ,- ,GANDERBAL,GANJIPORA BATWINA ,191131, l=GANDERBAL, o=Personal, serialNumber=66e7c458fadfd58d0b1e3af6cfa93526782626 d2f4a82a11e8de9af7cbcce6cd, D SHAFI MIR pseudonym=2b629042794c4ea9b1843d8890c0d835, 2.5.4.20=bdd39f64681c707ace4fd04cc14c01b0a11429fb4a e57a30d2d7e722195a1fbc, [email protected], cn=MOHAMMAD SHAFI MIR Date: 2024.10.25 18:55:43 +05'30' (Mohammad Shafi Mir) Company Secretary Investor Presentation for Quarter and Half Year Ended September 30, 2024 10/25/2024 1 Disclaimer The Jammu and Kashmir Bank has created this presentation exclusively for general informational reasons, disregarding any individual's informational demands, financial circumstances, or special goals. Except for the historical information contained herein, statements in this presentation that contain terms or phrases like "is," "aims," "will," "would," "indicating," "expected to," "guidance," "way forward," "expected," "estimate," "objective," "goal," "strategy," "philosophy," "project," etc., and similar expressions or variations of such expressions may constitute ‘forward-looking statements’. Several risks, uncertainties, and other factors are included in these forward-looking statements, and they have the potential to cause actual results to differ materially from those predicted by the statements. While the Bank has made reasonable assumptions to support the forward-looking statements, if any, in this presentation, there are still risks and uncertainties that could affect the Bank's ability to successfully implement its strategy, such as the dynamic and complex internal and external environment, which includes but is not limited to market, business, legal risks/changes in law, etc., future levels of non-performing loans, the Bank's growth and expansion in business, the impact of any acquisitions, the adequacy of its allowance for credit losses, its provisioning policies, the actual growth in demand for banking products and services, investment income, and cash flow projections. Note: “All financial figures in the presentation are from Audited Financials/Limited Reviewed financials and/or upon the forward-looking statements based on Management estimates. Anyone who relies on these financial data does so at their own risk and responsibility, and the Bank is not responsible for any gains or losses that result from this use of the data”. 10/25/2024 2  Jammu and Kashmir Bank Limited – Oldest Private Sector Bank in India Jammu and Kashmir Bank Limited, was incorporated on October 1, 1938 and today caters to a wide range of customers including retail, (₹ CRORE ) 226385 236552 235923 241838 corporate, agricultural, and MSME. 222653 101777 103350 103920 Widespread Branch Network: 1008 Branches, of which 834 are 96063 97842 operating in the UT of J&K, 37 in UT of Ladakh and 137 branches across 20 states & UTs outside the UTs of J&K and Ladakh. 126590 128542 134775 132573 137918 The GoJK is a majority holder, however the Bank enjoys full operational autonomy. The Bank has a subsidiary called JKB Financial Services Limited and is also the Sponsor bank of J&K Grameen Bank Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Limited. Deposits Total Advances(incl. TWO) Business The Bank leverages technology to identify opportunities and deliver products and services. 551 381 421 639 415 Strong market presence and designated as Agency Bank by RBI for conducting government banking in UTs of J&K and Ladakh. Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 PAT (₹ crore) J&K Bank stands as a pillar of support for the local communities while also extending its exceptional services beyond these regions. TWO – Technical Write Off 10/25/2024 3  2021-2024 Journey of 8 Decades  Global CSR Excellence & Leadership Award  Top Banker Award for PMEG  Total Business crossed ₹ 2 lakh crore in Fiscal 2023  Prestigious ‘Times Now India’s Impactful CEO - Listing on Stock 2000s 2023’ Award bestowed upon MD & CEO Baldev Exchanges Prakash  Licensed Status  First Scheduled Commercial Bank (SCB) in the Bank  Sponsored RRB 1980s country to have been awarded Payment Card Incorporated 2010-2020 Industry Data Security Standard (PCIDSS) Version 4 and Business Certification for both Issuance and Acquiring Commences  IT Developed to offer Business 1990s Internet Banking  Best MSME Bank award at MSME Banking  Tied up with an MNC Excellence Awards (2023) for Bancassurance  QIP of ₹ 750 crores completed in FY 2023-24 1970s  Platinum Award at Infosys Finacle Innovation  Sponsored 2nd RRB Awards – 2024 under the category of Process innovation 1938-39  Best Performance on Profitability award in the category of Private Sector Bank (Mid size) at the 2nd ICC Emerging Asia Banking Conclave & Awards 2024  India Ratings has upgraded the Bank’s long-term issuer rating to INDAA- from INDA+ with stable outlook. 10/25/2024 4  Interest Earnings and Advances Mix 3500 3,124 3000 2,994 3.7% 2,881 2,910 3.4% 2,764 3.0% 3.5% Gross Advances Mix – September 30, 2024 2.5% 20.8% 20.4% 2500 19.6% 19.7% 20.2% 32% 2000 68% 1500 Corporate Advances Retail Advances 76.9% 76.3% 75.5% 77.2% 77.4% 1000 Gross Advances Mix – June 30, 2024 500 33% 0 67% Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Other Interest Income 70 87 101 101 117 Interest on Investments 559 565 572 610 649 Interest on Advances 2135 2229 2237 2283 2358 Corporate Advances Retail Advances All figures, other than percentage, in ₹ crore 10/25/2024 5  Q2/HY1 FY25 Performance Q2 Q1 Q2 HY 1 HY 1 Particulars FY 2023-24 FY 2024-25 FY 2024-25 FY 2023-24 FY 2024-25 Net Interest Income 1,333.83 1,369.23 1,435.93 2,617.13 2,805.15 Other Income 190.31 194.10 296.08 418.58 490.18 Operating Expenses 989.67 968.65 945.02 1,973.19 1,913.67 Operating Profit 534.47 594.68 786.99 1,062.52 1,381.66 Provisions & Contingencies (9.94) (17.47) 32.53 66.79 15.05 Profit Before Tax 544.41 612.15 754.46 995.73 1,366.61 Provision for Tax 163.34 196.66 203.54 288.21 400.20 Net Profit / (Loss) 381.07 415.49 550.92 707.52 966.41 All figures, other than percentage, 10/25/2024 in ₹ crore 6  Q2 FY25 Performance at a Glance (YoY) Profitability Growth Capital Adequacy Asset Quality NIM Deposits Tier I GNPA (%) (Annualized) ₹ 1,37,918 crores 12.70% 3.95% 3.90% Up 9.0% (was 11.68%) (was 5.26%) (was 4.07%) PAT Net Advances CET 1 NNPA (%) ₹ 551 crores ₹ 96,139 crores 11.66% 0.85% Up 44.6 % Up 9.5% (was 10.45%) (was 1.04%) RoA Total Business CRAR PCR (%) (Annualized) (Including TWO) 14.99% 90.54% 1.41% ₹ 2,41,838crores (was 14.53%) (was 89.99%) (was 1.08%) Up 8.6% TWO – Technical Write Off 10/25/2024 7  Jammu and Kashmir Bank Limited | Q2 FY25 – Key Financial Ratios Cost of Deposits (%) Cost of Funds (%) 4.95 4.83 4.91 4.82 4.78 4.71 4.66 4.80 4.55 4.38 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Yield on Advances (%) Yield on Investments (%) 9.78 6.73 6.78 6.74 6.68 6.67 9.50 9.48 9.50 9.57 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 10/25/2024 Annualized Ratios 8  Jammu and Kashmir Bank Limited | Q2 FY25 – Key Financial Ratios Return on Assets - Annualized (%) Return on Average Networth - Annualized(%) 25 23.74 1.69 20 1.08 1.41 18.71 15 1.15 1.08 16.59 16.89 14.82 10 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Earnings Per Share - Annualized (Rs.) Book Value Per Share (Rs.) 25 104.11 109.79 23.2 95.86 99.59 20 87.7 20.01 15 14.78 16.13 15.09 10 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 10/25/2024 9 Key Strengths of the Bank 1 Strong legacy, loyal customer base and an established brand with over 85 years of operations 2 Strong presence in fast growing region of J&K and increasing presence in other strategic regions 3 Healthy mix of retail in overall advances mix with focus on MSME and agriculture segment 4 Consistently growing deposit base with best in class low-cost retail CASA 5 Turnaround Story with increasing PCR and improvement in asset quality 6 Fast improving digital presence 7 Professionally managed Bank with experienced senior management team and board of directors 10/25/2024 10  Strong presence in JKL Region and increasing presence across India Branches in 871 J&K and Ladakh (JKL) Urban, 11%, Branches Semi 137 outside JKL Urban, 16%, Branch Distribution Rural, Network 54%, 1424 ATMs Metro, 19%, 22 States / UTs ROI, ROI, 10.6%, 28.2%, Total Gross Advances Deposits JKL, JKL, 71.8%, 89.4%, The J&K and Ladakh growth story continues with major infrastructure under implementation and some strategic ones nearing completion that will drive growth for J&K Bank in the near future All data provided herein pertains to the period ended / as at June 30, 2024 10/25/2024 11  Fast improving digital presence Credit Card Users Debit Card Users (in number) (In Lacs) 123425 120788 46.06 117847 44.17 113166 43.07 108164 41.11 41.65 SEP-23 DEC-23 MAR-24 JUN-24 SEP-24 SEP-23 DEC-23 MAR-24 JUN-24 SEP-24 Internet Banking Users Mobile Banking Users (In Lacs) (In Lacs) 26.78 6.88 24.36 25.52 6.77 21.45 6.67 21.70 6.55 6.37 SEP-23 DEC-23 MAR-24 JUN-24 SEP-24 SEP-23 DEC-23 MAR-24 JUN-24 SEP-24 10/25/2024 12 Professionally managed Bank with experienced SMPs and Board Of Directors MR. BALDEV PRAKASH (MD & CEO ) MR. NABA KISHORE SAHOO Over three decades with the country’s largest bank Nearly 4 decades of experience and risen through the ranks Multiple degrees and diplomas offered by the IIBF : CAIIB, Diploma in Treasury, Very rich and diverse experience in banking industry with expertise in Credit, Risk Investment and Risk Management, Diploma in International Banking and Finance Management & HR. DR. PAWAN KOTWAL, IAS MR. UMESH CHANDRA PANDEY Presently posted as Advisor to Lieutenant Governor, UT of Ladakh (1994 IAS) Nearly 4 decades of experience as a Chartered Accountant Wealth of Administrative acumen and proficiency having previously served as Strong Competencies in Corporate Law, Taxation, Project Report, M & A Principal Secretary various ministries including P&M Dept. in UT of Ladakh. Transactions, Statutory Compliance Audit – Direct Tax/ Indirect Tax & Labor Laws MR. SANTOSH DATTATRAYA VAIDYA, IAS MR. ANIL KUMAR GOEL Presently posted as Principal Secretary Finance, UT of J&K 1998 AGMUT Qualified Arbitrator & Mediator, Information Systems Auditor (DISA), Forensic B-tech from IIT-Kharagpur PG(Econ) (IGNOU) and Masters in Public Policy from Auditor & Fraud Detector (FAFD) Johns Hopkins University, United States. 34 years expertise in Corporate & Tax Laws, Consultancy, Statutory Audits DR. MANDEEP K BHANDARI, IAS MR. ANAND KUMAR MBBS with Gold Medal, administrative and professional expertise of >20 years (IT) specialist who has experience of more than three decades in IT development Principal Secretary to Hon’ble Lieutenant Governor of UT of J&K and is also and management and is a BE(IT) from IIT and a PGDM from IIM-L. holding charge of CEO Amarnathji Shrine Board Worked at multiple MNCs and large groups: Citigroup, HSBC, Barclays, Fiserv, etc. MR. R. K. CHHIBBER MR. SUDHIR GUPTA Over three decades of banking experience, his areas of expertise include Credit, Over three decades of experience in different capacities across the operational Finance, IT, Corporate & Retail Banking, Risk management, Trade Finance, topography of the Bank with expertise in Credit, Finance, Corporate & Retail Foreign exchange, Business continuity planning, HR, Bancassurance Banking, Customer Service, Trade Finance, Foreign exchange, BCP etc. DR. RAJEEV LOCHAN BISHNOI MS. SHAHLA AYOUB Credit specialist and advises corporates and banks on balance sheet stress, risk Works as an Assistance Professor in the DHE, J&K and brings to Board an processes and improving the overall financial health of the enterprise. affluence of Economic expertise and perspicacity and has strong interests in Partner in Chartered Accountancy firm M/S Jain & Malhotra, New Delhi. Conflict Economics, Financial Inclusion and Developmental Economics. 10/25/2024 13  Key Strategies Focus on improving asset quality and maintaining NPA levels and avoiding slippages Emphasis on retail, agriculture and MSME segment Increase CASA Deposit Base and reduce cost of funds Continue our investments in technology to support our digital banking and reduce the cost Expand beyond Jammu and Kashmir and Increase customer penetration through Focus on increasing Non-interest income through expansion of branch and ATM network interventions in Treasury and Financial Services and onboarding more Bancassurance partners 14 10/25/2024  Condensed Profit And Loss Account Change Q2 Q1 Q2 Change YoY Change QoQ HY 1 HY 1 YoY FY 2023-2024 Particulars FY 2023-24 FY 2024-25 FY 2024-25 (%) (%) FY 2023-24 FY 2024-25 (%) Interest Earned 2,764.15 2,994.39 3,123.55 13.0 4.3 5,421.23 6,117.93 12.9 11,212.37 Interest Expended 1,430.32 1,625.16 1,687.62 18.0 3.8 2,804.10 3,312.78 18.1 6,008.68 Net Interest Income 1,333.83 1,369.23 1,435.93 7.7 4.9 2,617.13 2,805.15 7.2 5,203.69 Other Income 190.31 194.10 296.08 55.6 52.5 418.58 490.18 17.1 825.48 Operating Income 1,524.14 1,563.33 1,732.01 13.6 10.8 3,035.71 3,295.33 8.6 6,029.17 Operating Expenses 989.67 968.65 945.02 (4.5) (2.4) 1,973.19 1,913.67 (3.0) 3,752.29 Operating Profit 534.47 594.68 786.99 47.2 32.3 1,062.52 1,381.66 30.0 2,276.88 Provisions & Contingencies (9.94) (17.47) 32.53 (427.3) (286.1) 66.79 15.05 (77.5) (107.69) Profit Before Tax 544.41 612.15 754.46 38.6 23.2 995.73 1,366.61 37.2 2,384.57 Provision for Tax 163.34 196.66 203.54 24.6 3.5 288.21 400.20 38.9 617.30 Net Profit / (Loss) 381.07 415.49 550.92 44.6 32.6 707.52 966.41 36.6 1,767.27 All figures, other than percentage, in ₹ crore 10/25/2024 15  Condensed Balance Sheet Particulars Sep 30, 2023 Jun 30, 2024 Sep 30, 2024 Capital & Liabilities Capital 103.16 110.13 110.13 Reserves and Surplus 10,547.60 12,615.82 13,233.92 Deposits 1,26,589.73 1,32,573.13 1,37,918.27 Borrowings 3,782.77 4,525.98 2,884.46 Other Liabilities and Provisions 4,596.13 5,102.49 5,340.59 Total 1,45,619.39 1,54,927.55 1,59,487.37 Assets Cash and Balance with Reserve Bank of India 7,129.54 6,387.75 7,254.66 Balance with Banks & Money at Call & Short Notice 315.81 101.97 273.52 Investments 32,642.62 33,065.84 38,740.69 Advances 87,817.84 95,449.77 96,139.14 Fixed Assets 2,274.13 2,241.85 2,228.81 Other Assets 15,439.46 17,680.37 14,850.54 Total 1,45,619.39 1,54,927.55 1,59,487.37 All figures, other than percentage, in ₹ crore 10/25/2024 16  Turnaround Story with Decadal High PCR and improvement in asset quality Gross & Net NPA (%) Provision Coverage Ratio (%) 5.26 4.84 91.61 91.58 91.57 4.08 3.91 3.95 GNPA 90.54 NNPA 89.99 1.04 0.83 0.85 0.79 0.76 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 CREDIT COST (%) Gross Slippage Ratio (%) 1.62 1.36 1.11 1.06 0.76 0 0 0 0 0 SEP-23 DEC-23 MAR-24 JUN-24 SEP-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 10/25/2024 17  Interest Expenditure and Operating Expenditure 1800 1200 1,688 1,601 1,604 1,625 4.7% 1600 5.5% 5.1% 4.7% 1000 990 969 1,430 459 1400 6.2% 912 867 867 27.1% 28.8% 1200 800 30.4% 30.4% 1000 44.2% 600 800 95.3% 94.9% 95.3% 94.5% 93.8% 600 400 72.9% 71.2% 69.6% 69.6% 400 55.8% 200 200 0 0 Dec- Mar- Mar- Sep-23 Jun-24 Sep-24 Sep-23 Dec-23 Jun-24 Sep-24 23 24 24 Other Interest Expenses 89 81 76 89 79 Other Operating Expenses 268 277 383 279 287 Interest on Deposits 1341 1519 1528 1536 1609 Staff Expenses 722 635 484 690 658 10/25/2024 18  Key Ratios and Performance Indicators Particulars Q2 FY 2024 Q1 FY 2025 Q2 FY 2025 HY 1 FY 2024 HY 1 FY 2025 Profitability Net Interest Margin (%) - Annualized 4.07 3.86 3.90 4.03 3.88 Operating Profit (₹ crore) 534.47 594.67 786.99 1,062.52 1,381.66 Profit after Tax (₹ crore) 381.07 415.49 550.92 707.52 966.41 Cost to Income Ratio (%) 64.93 61.96 54.56 65.00 58.07 Return on Assets (%) – Annualized 1.08 1.08 1.41 1.01 1.24 Capital Adequacy Tier I Capital (%) 11.68 12.81 12.70 11.68 12.70 CET 1(%) 10.45 11.76 11.66 10.45 11.66 CRAR (%) 14.53 15.07 14.99 14.53 14.99 Asset Quality Gross NPA (%) 5.26 3.91 3.95 5.26 3.95 Net NPA (%) 1.04 0.76 0.85 1.04 0.85 Provision Coverage Ratio (%) 89.99 91.57 90.54 89.99 90.54 Return Ratios Yield on Advances (%) – Annualized 9.50 9.50 9.57 9.42 9.54 Cost of Funds (%) 4.52 4.78 4.91 4.50 4.85 Cost of Deposits (%) 4.38 4.66 4.80 4.35 4.73 All figures, other than percentage, in ₹ crore 10/25/2024 19  Capital Adequacy Ratios Sep 30, 2023 Jun 30, 2024 Sep 30, 2024 Particulars Capital Adequacy Ratio Risk Weighted Assets 15.33 15.07 14.99 Credit Risk 71,206 83,920 86,458 14.53 14.18 Market Risk 1,285 1,505 113 Operational Risk 8,896 9,937 9,937 13.09 12.81 12.70 Total Risk Weighted Average 81,387 95,362 96,508 11.68 11.74 Tier I Capital Funds 9,508 12,217 12,257 Tier II Capital Funds 2,321 2,158 2,208 Total Capital Funds 11,828 14,375 14,465 2.85 2.44 2.24 2.26 2.29 Tier I Capital 11.68% 12.81% 12.70 CET – I 10.45% 11.76% 11.66 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Tier II Capital 2.85% 2.26% 2.29 Tier I Capital Tier II Capital CRAR CRAR 14.53% 15.07% 14.99 All figures, other than percentage, in ₹ crore 10/25/2024 20  Asset Quality | Categories of Advances September 30, 2023 September 30, 2024 Category Amount % of Gross Advances Amount % of Gross Advances Standard 86,900 94.74 95,326 96.05 Sub-Standard 498 0.54 444 0.45 Doubtful 3,405 3.71 2,629 2.65 Loss 924 1.01 843 0.85 Gross Advances 91,727 100.00 99,242 100.00 % of Standard Special Mention Accounts Amount Amount % of Standard Advances Advances SMA 0 13,704 15.77 13,301 13.95 SMA 1 3,106 3.57 4,085 4.29 SMA 2 2,847 3.28 3,167 3.32 All figures in ₹ crore except in percentage Total SMA 19,657 22.62 20,554 21.56 All figures, other than percentage, in ₹ crore 21 21  Asset Quality | Movement of Gross NPAs Particulars Q2 FY 2024 Q1 FY 2025 Q2 FY 2025 HY 1 FY 2024 HY 1 FY 2025 At a Gross NPA Level Opening Balance 5,104 3,956 3,858 5,204 3,956 Additions during the period 225 174 256 509 430 Upgradations during the period 235 94 93 458 188 Write off (including TWO) 3 11 3 6 14 Compromise/Settlements 9 39 12 17 51 Recoveries 255 128 89 406 217 Gross NPA 4,827 3,858 3,916 4,827 3,916 Less Provisioning 3,910 3,130 3,103 3,910 3,103 Net NPA 917 728 813 917 813 All figures in ₹ crore 10/25/2024 22  Sector-Wise Credit Deployment and NPA (As of September 30, 2024) Sector Gross Advances Exposure (%) Gross NPA GNPA (%) Personal Finance 38,726.18 39.02% 322.43 0.83% Trade 11,593.82 11.68% 814.82 7.03% Financial Markets 10,391.86 10.47% 625.23 6.02% Agriculture 9,685.32 9.76% 424.30 4.38% Services 9,494.64 9.57% 723.80 7.62% Manufacturing 7,083.63 7.14% 615.94 8.70% Infrastructure 8,606.16 8.67% 204.42 2.38% Against Cash Collaterals 1,516.63 1.53% 0.71 0.05% Real Estate 1,284.27 1.29% 174.43 13.58% Others 859.50 0.87% 10.18 1.18% Total 99,242.01 100% 3,916.26 3.95% All figures, other than percentage, in ₹ crore 10/25/2024 23  Gross Advances Mix Personal Finance Trade & Services Manufacturing Financial Markets Agriculture Others 88,402 86,156 82,035 79,113 96,982 98,580 99,242 91,727 93,538 11.8 % 10.7 % 12267 13.4 % 11.6 % 9.7 % 9.6 % 9685 11.5% 11.0 % 11.6 % 11.1 % 10392 5.9 % 10.2% 7.8 % 9.2 % 7084 8.5 % 9.0 % 20.9 % 20.9 % 21088 23.8 % 20.9 % 37 % 37.20% 38.20 % 38.5 % 38726 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Others 10588 9991 11470 10546 12267 Agriculture 8921 8534 9422 9463 9685 Financial Markets 9783 11340 11286 10936 10392 Manufacturing 7410 7417 7564 9091 7084 Trade & Services 20218 20214 20231 20639 21088 Personal Finance 34807 36042 37009 37905 38726 All figures, other than percentage, in ₹ crore 10/25/2024 24  Consistently growing deposit base with best-in-class low-cost retail CASA 1,34,775 1,32,573 1,37,918 1,26.590 1,28,542 49.4% 49.5% 50.2% 51.4% 49.4% 40.4% 40.1% 39.5% 39.5% 38.7% 10.2% 10.5% 11.0% 10.3% 9.9% Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Term Deposits 62520 63507 66702 66592 70883 Savings Deposits 51198 51585 53249 52325 53406 Current Deposits 12871 13450 14824 13656 13629 CD Ratio 72.00% CASA Ratio 50.51% 49.77% 69.57% 50.61% 50.59% 48.60% 69.82% 69.71% 69.37% Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 All figures, other than percentage, in ₹ crore 25  Investments Profile 45000 40000 38,741 Duration of Investments (In years) 34,987 35000 32,643 33,066 31,576 30000 3.44 63.5% 25000 69.7% 20000 83.1% 85.6% 86.5% 3.29 3.21 3.23 15000 3.18 10000 34.3% 5000 28.6% 14.3% 13.4% 16.9% 0 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 HTM 27958 27312 29070 23032 24617 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Others 0 0 0 438 420 AFS 4677 4233 5916 9469 13282 HFT 8 31 1 127 422 10/25/2024 26  Asset Quality | External Rating of Corporate Advances (As on September 30, 2024) Rating No. of Borrowers Outstanding Amount Percentage (%) AAA 23 15,165 60.17 AA 17 2,981 11.83 A 14 2,020 8.01 BBB 19 1,267 5.03 BB & Below 168 2,795 11.09 Unrated Borrowers (Due to be rated) 51 976 3.87 Total Eligible for Rating 292 25,203 100.00 All figures, other than percentage, in ₹ crore 10/25/2024 27  Asset Quality | Restructuring of Advances (as on September 30, 2024) Standard NPA Total Sector BOS Provisions BOS Provisions BOS Provisions Services 207.01 11.68 180.83 152.41 387.84 164.09 Infrastructure 13.08 1.01 45.30 36.98 58.38 37.99 Manufacturing 215.41 13.55 262.68 187.75 478.09 201.30 Trade 41.55 3.77 244.14 225.19 285.69 228.96 Real Estate 69.13 4.74 156.47 156.47 225.60 161.21 Agriculture 74.43 7.10 115.54 104.24 189.97 111.34 Personal Finance 56.39 5.32 17.96 10.44 74.35 15.76 Others 0.06 0.00 1.95 1.95 2.01 1.95 Total 677.05 47.18 1,024.87 875.43 1701.92 922.60 All figures in ₹ crore 10/25/2024 28  Awards and Accolades Second best award for J&K Bank MD Baldev Prakash Best MSME Bank at MSME promoting Government honoured with prestigious Banking Excellence Awards Schemes under ‘Private Bank’ Times Now India’s Impactful (2023) category at MSME Banking CEO – 2023 Award Excellence Awards (2023) Award from HUDCO for Platinum Award under the Outstanding Performance outstanding contribution category of Process innovation Award for agriculture towards housing sector at Infosys Finacle Innovation financing at the 15th under PM Awas Yojana Awards - 2024 Agriculture Leadership Conclave First Scheduled Commercial Best Performance on Bank in the country to attain Award of Excellence for enrolling Profitability award in the the maximum number of APY the esteemed Payment Card category of Private Sector Bank Industry Data Security beneficiaries under the ‘Mission (Mid Size) at the 2nd ICC Upgrade’ campaign of PFRDA for Standard (PCIDSS) Version 4 Emerging Asia Banking Conclave certification FY 2024 & Awards 2024 29 10/25/2024  Shareholding Information No. of Shares held as No. of Shares % to Change Shareholding Pattern as on % to Particulars on Capital held as on Capital YoY Sep 30, 2024 Sep 30, 2024 Sep 30, 2023 65,40,98,280 59.40 65,40,98,280 63.41 (401 bps) 2.54% PROMOTERS 3.63% 5.26% 24,99,43,396 24.23 (152 bps) 6.46% RESIDENT INDIVIDUALS 25,00,87,938 22.71 FII / FPI 7,11,52,714 6.46 2,69,00,178 2.61 385 bps 59.40% 3,99,60,365 3.63 3,24,99,933 3.15 48 bps 22.71% INDIAN MUTUAL FUNDS INDIAN FINANCIAL 1,47,96,443 1.43 151 bps 3,23,89,904 2.94 INSTITUTIONS BODIES CORPORATES 2,80,10,734 2.54 2,46,74,944 2.40 14 bps NON RESIDENT INDIANS 2,03,95,480 1.85 2,10,11,252 2.04 (19 bps) 50,84,749 0.46 75,36,252 0.73 (27 bps) Others (AIF / IEPF / Trusts) Promoters Resident Individuals CLEARING MEMBERS 2,299 0.00 19,183 0.00 - FII/FPI Body Corporates Total 110,11,82,463 100% 103,14,79,861 100% - Indian Mutual Funds Others 10/25/2024 30  Thank You 10/25/2024 31 Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat Investor Brief for September 2024 A very Good Afternoon and warm welcome to all the participants to the J&K Bank September, 2024 Earnings Call. First let me introduce my Management Team who are accompanying me on this call; Executive Director, Mr. Sudhir Gupta Corporate Credit Head, Mr. Ashutosh Sareen Retail Credit and Liability Head, Mr. Narjay Gupta Treasury Head, Mr. Rakesh Koul Impaired Assets Portfolio Management Head, Mr. Rajesh Malla Tikoo Finance Head, Mr. Sushil Kumar Gupta And our Chief Risk Officer, Mr. Altaf Hussain Kira Before discussing the performance of the Bank, let me briefly taIk about the macroeconomic outlook. As we have ventured into the second half of the year, though global growth appears to be steady, however by historical standards it remains subdued. But taking into consideration the continuing geopolitical conflicts and intermittent volatility in the global financial markets, the global economic activity has shown resilience in the first half of the current financial year. Whilst IMF has retained its global growth forecast at 3.2% in 2024, it has upgraded India’s growth forecast for FY 2024-25 by 20 basis points to 7% from the previous estimate of 6.8% in April. This upgrade has come in the backdrop of improved prospects for private consumption, particularly in rural areas on the back of favourable monsoon, higher sowing activity and moderating inflation. With this upward revision, India’s growth story remains intact as India continues to maintain its position as the fastest growing economy amongst emerging markets and developing economies. The World Bank has also upgraded India’s growth forecast to 7% for FY 2024-25. Private consumption and investment, two major factors of growth with a combined share of more than 90% of GDP, are expanding at a robust pace of more than 7%. Total gross GST revenue for the year to date (upto August 2024) stands at Rs.9,13,855 crores which depicts a YoY increase of 10.1% affirming the continued momentum in the Indian economy. The resilience of Indian economy has navigated the domestic stock market to all time high, with FPI flows seeing a turnaround from net outflows of US$ 4.2 billion in April-May 2024 to net inflows of US$ Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat 19.2 billion during June-October 2024 (till October 7, 2024), reflecting investor confidence in India’s long term growth prospects. Though of late, there has been a correction in the domestic markets owing to FPI selloff sparked by Beijing’s stimulus package. Whereas the United States Federal Reserve has begun the policy pivot, by cutting the benchmark interest rate viz. the Federal Funds Rate by 50 basis points owing to the moderation of inflation and adverse impact of higher rates on unemployment levels creating recession worries, RBI has kept the policy repo rate unchanged demonstrating a balanced approach for managing inflationary risks while considering growth prospects. Coming to the specifics of economic outlook for our home territory, J&K’s GDP is projected to be at Rs.2,63,399 crores in FY25, growing 7.5% over FY24. The GDP is likely to double in the next five years with emphasis on service sector, industries, horticulture and tourism, according to the ‘J-K Economic Survey 2022-23’. The budgetary estimate for J&K for FY 2024-25 is about Rs.1,18,390 crores with continued emphasis on developmental activities and provisions for other ongoing initiatives for sustainable agriculture, new industrial estates, employment generation, developing tourism and social inclusion. Further, Union Budget has provided for a special central assistance of Rs.17,000 crores for J&K, which would lead to improvement in the fiscal position and enable the Government of J&K to work on fulfilling the developmental needs and aspiration of the local people. After the record inflow of tourists in J&K for FY 2023-24, the unprecedented growth in tourism sector continues with 1.08 crore tourists visiting in the first six months of 2024. The tourism sector has recorded an annual average growth rate of 15.13% during the last three years. Border tourism has picked up and hitherto unknown locations like Gurez, Keran and Teetwal have been opened up for tourism. In the early part of 2024, the number of foreign tourists has seen a staggering 61% increase on a YoY basis. With the ongoing investments in the tourism sector, Kashmir valley soon getting connected with rest of India through train, revival of cinematic interest in the region and rapidly emerging popularity of Kashmir as a top destination for weddings, the region expects even stronger numbers in the future. This would help the region’s economic transformation as tourism industry stands as the second largest sector in Kashmir after horticulture. Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat Now, speaking of the financial performance of the Bank for Q2 and HY1 of FY25, the Bank has posted another strong set of profitability numbers for this quarter, with quarterly operating profit crossing the Rs.750 crore mark and net profit for Q2 recorded at Rs.551 crores, witnessing a growth of 44.6% YoY, 32.6% QoQ and stays on course towards delivering results as per the guidance for the short to medium-term. Overcoming a de-growth in deposits in the previous quarter over the March levels, deposits have grown at 9% YoY. The traction in deposits that we had mentioned in our Q1 earnings call is clearly evident now with 4% QoQ growth in the current quarter. Despite the industry- wide pressure on CASA deposits with overall CASA in the banking industry declining to the pre-pandemic levels of 39%, owing mainly to continuing higher interest rate cycle and today’s youth with a higher risk appetite chasing better returns from mutual funds and capital markets, our Bank continues to have one of the best CASA ratios in the industry at 48.60% with CASA in our home territories of JKL, which accounts for around 89% of our deposit base, still above 51.50%. As we speak, the CASA of the Bank is again hovering in the vicinity of 50% with both demand and saving deposits growing over Q2 numbers in absolute terms. With the expected reversal in interest rate cycle in HY2 FY25, CASA is expected to improve. Advances have grown at 9.5% YoY with higher growth in ROI at 10.8% against the 7.2% growth in JKL, though the QoQ growth has been muted. Part of the muted growth can be attributed to the slowdown in economic activity in J&K on account of the assembly elections which recorded an impressive voter turnout of around 64%. With the successful conclusion of the elections, economic activity in the UT is expected to gather pace. Further, the advances to NBFCs have been restricted by design owing to the caution sounded by RBI. Another factor is the QoQ decrease in the Corporate Loan book of the Bank on account of a conscious decision, for the time being, to focus on higher yielding retail loans compared to corporate loans in order to compensate the pressure on margins on account of higher cost of deposits due to change in mix and the results are evident with an improved NIM QoQ. Personal Finance has grown at 11.4% YoY, most prominent being housing loans with growth of 15.6% YoY. ROI growth of 20.3% YoY in personal loans, with 21.2% in housing loans and 25.7% in car loans, is in line with the Bank’s strategy of making inroads in retail loan Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat segment in ROI. Sectoral credit to SME has also recorded a YoY growth of 12.7%. The geographical loan book composition continues to be at around the same levels - 72:28 for JKL and ROI with a retail corporate split of around 2:1 with retail loans being dominant in JKL and corporate loans dominating the ROI loan book. The income statement reflects a good growth with interest income for HY growing at 12.9% YoY and other income at 17.1% YoY while the operating costs have been restrained, owing to the moderation of employee costs, declining 3% YoY for HY. Operating profit for the HY has grown by 30% YoY registering an impressive increase of 32.3% QoQ. The Bank continues to register impressive profits with PAT for HY increasing 36.6% YoY, being recorded at Rs.966.41 crores for this half year. Despite the industry-wide pressure on margins, which is evident in our case also with the increase in Cost of Deposits for Q2 to 4.80% - on account of higher accruals to term deposits, Bank has not only been able to maintain but has recorded an improvement in NIM to 3.90% for this quarter and NIM for half year is recorded at 3.88%, which is above our conservative guidance. The annualized Return on Assets and Return on Equity for HY have been recorded at 1.24% and 16.52%, and are on the right trajectory as per our guidance for this fiscal. Cost to Income ratio, which has been a persistent concern during the recent years, has come down below the level of 60%, being recorded at 54.56% and 58.07% for quarter and half year respectively and is expected to continue to moderate in the short to medium term. In terms of asset quality, the gross slippage ratio continues to be under control and is below the 1% mark – 0.91% (annualized) for the half year against 1.25% for HY1 FY24. Though the total NPA (including TWO) has come down owing to TWO recovery of Rs.92 Crores, which also reflects in the boosted other income for Q2, GNPA and NNPA have recorded a marginal increase QoQ and have been recorded at 3.95% and 0.85% respectively as on 30 September 2024. PCR continues to be at a healthy level of above 90%. The marginal increase is partly on account of recovery actions under SARFAESI slowing down owing to the unavailability of revenue officials, who were engaged in facilitation of J&K assembly elections. Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat The restructured portfolio is also holding well with collection efficiency in standard restructured accounts at almost 100% during the quarter and half-year. The provision requirement on account of ageing of NPAs for the second half-year is estimated at about Rs.127 Crore but with our expected recoveries and resultant provision write backs, we expect the credit cost to be benign for the current fiscal. Even in the current quarter, there is no credit cost in spite of the marginal increase in Gross NPA. CRAR has been recorded at 14.99% and CET 1 at 11.66%, without reckoning the half-yearly profit which has an impact of 100 bps. With continuing healthy internal accruals, we are not looking at raising any additional equity during the current fiscal but may consider raising debt capital in the second half-year, if need be. At last an update on the continuing BPR transformation journey. The Bank has implemented WhatsApp Banking for offering an additional channel for servicing of customers. The Bank has also embarked on an ambitious transformational journey towards a revamped Sales and Service Operating Model for the Bank dubbed as ‘J&K Bank 2.0’ for which Ernst & Young has been roped in as a consultant. This project is a conscious and strategic move to break free from the constraints of traditional banking, propelling the Bank towards a future where agility, sales excellence and customer-centricity define our operations. We maintain our earlier guidance for FY 2025.  Credit Growth of ~ 15%  Deposit Growth of ~ 12%  CASA ~ 50%  NIM ~ 3.75% to 3.85%  RoA ~ 1.25% to 1.30%  RoE ~ 17% to 18%  GNPA ~ 3.50% Jammu and Kashmir Bank Limited Corporate Headquarters T +91 (0)194 248 3775 W www.jkbank.com M A Road, Srinagar 190001 F +91 (0)194 248 1928 E [email protected] Kashmir, India CIN: L65110JK1938SGC000048 Board Secretariat I thank you all and acknowledge your guidance, support and trust and we expect it to continue in the coming days. I will be glad to have your questions now………….Thank you very much. Concluding remarks after Q&A session Thank you, ____XX Moderator XX________, and thank you to all the participants for joining in today and being part of the healthy interaction. We hope to remain engaged more often and we will be looking forward to your suggestions and guidance for further betterment of our institution. For any further questions, queries, details, comments or anything else, the team is always available and you can also direct your queries to our Investor Relations desk and we will definitely respond...