JK Bank To targets Consolidation, Recovery of NPAs

Battling with 10% of NPAs, J&K Bank Chairman Parvez Ahmed last day mentioned that the bank will concentrate on the recovery of bad loans and consolidation in order to improve profitability in the years to come. Furthermore, the Chairman said that the bank has devised a strategy for NPA recovery. Once they are done with this consolidation phase, they will be able to manage it successfully and will head towards greater numbers.

The bank is facing a serious challenge of rising NPAs. As on March 2016, its gross NPAs soared to Rs 4,368.62 crore. J&K Bank's NPA is the range of 9.3% on the basis of numbers as on June 30, 2016.

Ahmed further added that they will cleanup, consolidate and pay dividends to the stake holders. NPA is very much manageable. They have formulated a policy to take care of this particular situation. With the global recovery system put in place, they will bring down NPA to a desired level.

It is going to take some time to consolidate. But J&K Bank will ensure growth again since they will also be focusing on development and business generations of the bank. The NPAs are in the range of around 10% teamed with the stressed assets portfolio which is around 10% more, that takes it to 20% of our portfolio.

The banking sector all over the country is facing this problem. Most of banks have similar number in terms of NPA as J&K Bank.

The disclosures made last time made it clear that numbers are less than other PSU banks which have NPA on higher side.

The CEO further added that their focus will remain now on consolidation and cleaning of the balance sheet for the coming 4-6 quarters with a moderate growth, without compromising on the quality, in the range on 10-15%.

Once they are sure that they have done with the cleaning of the balance sheet, they will again revive the growth trajectory and also ensure that they come back to the good old numbers.During the first half of today’s trading session, JK Bank share pricerolled below 0.81 per cent. The stock is trading at Rs. 67.20, opened at Rs. 68.

JK Bank share price is one of the top 500 performing stocks for this quarter, identified by Dynamic Levels. For further details on the stock, refer to JK Bank share price history.