'Ambition to double the business within three years'

'The way the bank is doing in the past 4-5 quarters, no reason to see why we will not be able to achieve that.'

Amitava Chatterjee took charge as managing director & chief executive officer of Jammu & Kashmir Bank in December last year.

Chatterjee was a deputy managing director of State Bank of India looking after corporate credit before his current role.

He shares his priorities and growth roadmap for J&K Bank in a telephonic interview with Manojit Saha/Business Standard.

What would be your immediate priorities?

There are quite a few. One would be the continuation of work on the non-performing assets (NPA) front. The bank has done quite a bit and this was the primary reason why we could maintain the profit in the past 6-7 quarters.

NPA will remain in the focus (J&K Bank's net profit grew 26.2 per cent to Rs 5,315 crore in the October-December period).

I would like to explore the potential that is available in the rest of the country, for loans. It has hardly been explored.

We are present in so many states, but have not been able to explore the potential so far.

Another area of focus will be cost to income ratio, although it has come down to 57 per cent from 62 per cent on account of reduction in employee cost, which traditionally has been high.

I would be more interested in bringing down the ratio by increasing the income. These three would be the primary focus areas for me.

What is the contribution of J&K and Ladakh, and the rest of India in the total business?

It is 76:24. It will rebalance because ticket sizes here are small-ticket loans.

Another thing that we can do is participate in the developmental exercise, which is going on in this region.

That will give us an opportunity to increase the ticket size in this region.

But essentially, the big-ticket loans will come from the rest of the country.

The total business of the bank was Rs 2.45 trillion as on December 31.
Where do you see the number by the end of your three-year term?

I have an ambition to double the business within three years. Opportunity and potential is there. The way the bank is doing in the past 4-5 quarters, I don't see the reason why we will not be able to achieve that.

With whatever I have learnt in being with the largest bank of the country, I would like to do some value addition to this bank.

Loan growth was only 7 per cent year-on-year. How do you plan to beef up loan growth?

This geography has seen two elections in the current financial year. The entire banking machinery of the bank gets involved with the election process.

So, there were disruptions. And there was severity of winter during November, December and January.

So, I don't read much into the single digit advances growth. If you look at the retail business -- consumer segment, agriculture, MSME -- it has grown by 10 per cent each.

I believe the reason behind why the overall numbers are muted, is that quite a few corporate loans from the rest of the country have closed down due to normal repayment.

We have a strong pipeline going forward.

What is your loan growth expectation in FY26?

The railway line connectivity that is going to happen is going to throw up huge opportunities for agricultural produce of this geography -- which are higher in the price segment like saffron, high quality apples, and apricots.

These have not found a way outside the state due to communication issues.

Agri will be a priority for me in this area. Credit growth of 18-20 per cent is what I would look at within the state and Ladakh.

And around 15-18 per cent outside this area. So overall, we have a guidance of 15-16 per cent loan growth in FY26.

The share of current and savings account deposits has fallen from about 50 per cent to 48 per cent levels, but it is still very high.
Can you maintain these levels?

Current account saving account (Casa) growth is something I would like to focus on. Because going forward, government deposits for all banks will come down.

Improvement in the deposit franchise for the rest of the country, which is eluding the bank so far, will be important.

Casa is definitely under pressure for the entire banking industry.

We have 62-63 per cent market share in the geography we operate in.

Maintaining 50 per cent could be difficult, but I think we can manage at this kind of level.

Net interest margins for Q3 was at 4.04 per cent. With the interest cycle set to turn, how will your margin trajectory be impacted?

Maintaining the margins will be difficult for any bank in the country. A strong Casa base, as we have, will be helpful for us.

If you look at the loans in the state, even the government-sponsored schemes that we have command a fair interest rate for the bank.

We were able to maintain good rates on advances in the state.

The competition comes when finer rates are quoted for big ticket loans.

If we are able to manage the credit growth in the retail segment, I believe we can maintain the margins.

What would be your guidance for gross NPA?

For the current financial year, the guidance is 3.5 per cent, which I believe we would be able to achieve. Bringing it to below 3 per cent by March 2026 is the target I have.

Feature Presentation: Aslam Hunani/Rediff.com