See NIMs above 4%; profits at 20% for FY14: J&K Bank

In an interview to CNBC-TV18, Mushtaq Ahmad, Chairman & CEO, Jammu and Kashmir Bank said the bank aims to maintain net interest margins (NIMs) above 4 percent for FY14.

He further added that the bank expects loan book to grow at 20-25 percent and profitability around 20 percent going forward. The NIM for the bank stood at 4.25 percent for H1FY14. The bank reported a decent set of number for the second quarter ending September 2013. The net profit for the bank increased 18 percent on half yearly basis. Also read: Next decade likely to belong to banking: Morgan Stanley Below is the verbatim transcript of his interview on CNBC-TV18 Q: This is a fairly decent set of numbers that you all have reported, how do you see things panning out in the second half, what might you do for instance in terms of margins, credit growth and bad loans? A: Our net profit half yearly basis has increased by 18 percent from 515 crore to Rs 611 crore. Credit growth despite stress has been around 20 percent. We have grown from Rs 34000 crore to Rs 41000 crore. Our net interest income has increased by 23 percent from Rs 1272 crore to Rs 1528 crore and gross non-performing assets (NPAs) of course we have maintained below 2 percent, it is at 1.69 percent. Q: What will your margins come out for the full year and the second half; also will you be able to peak off at 1.7 percent on gross non-performing loans (NPLs)? A: For future we expect that we will be growing our loan book by about 20 percent and in Jammu & Kashmir state we will be growing by around 25 percent. As far as liabilities are concerned we will be growing between 15-17 percent. We are also aiming that the liabilities that are deposits of J&K Bank would be more. I had said that by the year-end we should have a profit of around 25 percent but with the stress that is prevailing in the market, this figure has to be revised. So, we will be comfortable with a profitability of about 20 percent. Despite all the stress that we have witnessed in the market, which still continues, we have a half year net interest margin of 4.25 percent. I am sure that we will be in a position to maintain net interest margin above 4 percent in the coming days as well.