WAJAHAT SHABIR
SRINAGAR: Jammu & Kashmir Bank Limited emerged as the dominant profit-making public sector enterprise in Jammu and Kashmir, accounting for 93.05 per cent of the total profit reported by the Union Territory’s public sector enterprises in 2022-23, according to the Comptroller and Auditor General of India (CAG).
The CAG, in its Composite Audit Report for the period ended March 2023, said J&K Bank recorded a net profit of ₹1,197.38 crore in 2022-23. The total profit reported by the 11 profit-making PSEs stood at ₹1,286.79 crore.
The report was tabled in the Jammu and Kashmir Assembly last month.
The report said J&K Bank was the only PSE among those under audit that declared or paid a dividend. For the year ending March 31, 2023, the Bank paid a 50 per cent dividend on its paid-up share capital.
J&K Bank is the only listed PSE among the UT enterprises covered by the report and is listed on both the National Stock Exchange and the Bombay Stock Exchange.
According to the CAG, the Bank had a total paid-up equity capital of ₹103.15 crore, of which 63.41 per cent was held by the Government of Jammu & Kashmir. The remaining 36.59 per cent was held by foreign institutional investors, resident individuals and other investors.
The market value of the Bank’s shares also witnessed a significant rise during the period under review. It increased from ₹3,013.22 crore as on March 31, 2022, to ₹5,070.75 crore as on March 31, 2023.
The CAG also highlighted the Bank’s contribution to the overall turnover of J&K PSEs. J&K Bank recorded a turnover of ₹9,355.11 crore in 2022-23, making it the largest contributor among the public sector enterprises.
The Bank’s return on investment also improved substantially. The CAG calculated its ROI at 243.81 per cent in 2020-21, 291.95 per cent in 2021-22 and 395.17 per cent in 2022-23.
The report attributed the rise primarily to a significant increase in profitability, driven by higher interest income resulting from credit growth.
The Bank’s Return on Capital Employed (ROCE) increased from 14.56 per cent in 2021-22 to 24.07 per cent in 2022-23, while its Return on Equity (ROE) rose from 20.47 per cent to 37.95 per cent during the same period. The CAG stated that the high ROCE and ROE were attributable to the high profit after tax earned by J&K Bank.
The report also records a significant equity infusion by the J&K Government. The CAG said the ₹554.32 crore equity capital outgo in 2021-22 included ₹500 crore in respect of J&K Bank.
The amount was used to acquire 16,76,72,702 equity shares of the Bank on a preferential basis at an issue price of ₹29.82 per share, including a share premium of ₹28.82.
The CAG further noted that J&K Bank was among the few PSEs to meet corporate governance requirements. Of the 10 PSEs required to appoint independent directors, only J&K Bank had appointed the required number during 2022-23. It was also the only PSE among those required to do so that had constituted an Audit Committee and a Nomination and Remuneration Committee.
