#1Jammu & Kashmir Bank Limited Corporate Headquarters M A Road, Srinagar 190001 Kashmir, India. CIN: L65110JK1938SGC000048 Board Secretariat T +91 (0) 194 248 3775 W www.jkbank.com F +91 (0) 194 248 1928 E [email protected] J&K Bank Ref: JKB/BS/F3652/2022/289 Date: 23rd March, 2022 National Stock Exchange of India Ltd. Exchange Plaza 5th Floor Plot No. C/1 G-Block Bandra Kurla Complex Bandra (E) Mumbai - 400 051 Symbol: J&KBANK The BSE Ltd. Phiroze Jeejeebhoy Towers Dalal street Mumbai 400 001 - Scrip Code: 532209 Sub: Revised Presentation for Schedule of Non-Deal Roadshows/Analyst/Institutional Investors Meet for Jammu and Kashmir Bank Limited (the "Bank") Dear Sir, Further to our letter no. JKB/BS/F3652/2022/286 dated 22nd March, 2022 regarding Non-Deal Roadshows and meeting with prospective investors from March 23, 2022 onwards to March 25, 2022, please be informed that the number of Branches (974) on page No. 5 of the Presentation includes 05 Impaired Asset Branches (licenced by RBI as Branches) and the amount of Total Bank Deposits of the J&K UT (on page 4) is INR 1526929.0 Million instead of INR 1525673.8 Million mentioned therein. A copy of revised Corporate/ Investor Presentation is enclosed. The same is also available on the website of the Bank at www.jkbank.com. This is for your information and appropriate dissemination. Thanking you Yours faithfully For Jammu and Kashmir Bank Limited Speeng (Mohammad Shafi Mir) Company Secretary#2Investor Presentation - Q3 / 9M FY 2021-22 DC BC SC 3 C C C C BC BC SC SC BCRC OC C BC9C SC C SC SC SC 9C 9C9C CSC SC5C SC SC 9C SC SC SC RESURGENCE WITH SUSTAINABLE PROFITABILITY J&K Bank#3Disclaimer J&K Bank This presentation has been prepared for informational purpose only by the Jammu and Kashmir Bank Limited (the "Bank"). The Bank, as such, makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. This presentation may not be copied, published, distributed or transmitted in any manner. This presentation does not constitute a prospectus, offering circular or offering memorandum and is not an offer or invitation to buy or sell any securities, nor shall part, or all, of this presentation form the basis of, or be relied on in connection with, any contract or investment decision in relation to any securities. Furthermore, this presentation is not an offer of securities for sale in India, the United States or any other jurisdiction. Neither this presentation nor any information thereof nor the fact of its distribution shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Bank, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Bank or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this presentation are cautioned not to place any reliance on these forward-looking statements. The Bank disclaims any obligation to update these forward-looking statements to reflect future events or developments. The Bank assumes no responsibility to amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this presentation, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. The Bank may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. 2#4SNAPSHOT OF J&K UT AND J&K BANK DEMOGRAPHY, PROFILE BANKING HABITS OF J&K UT 3#5Demography of Jammu & Kashmir (J&K) Total Area of the UT Capital Population Sex Ratio B.P.L. Population (%) Languages Literacy Rate (%) Un-employment Rate Crops in J&K J&K Bank 42,241 Sq. Kms. - The UT is bounded on the South by Himachal Pradesh and the Punjab, on the South-West and West by Pakistan, on the North by China, Afghanistan and a little of Tajikistan, and on the East by Chinese Tibet. The UT ranks 17th in population among the States and Union Territories of India. Summer (May to October): Srinagar Winter (November to April): Jammu 1,22,67,013 (12.3 Million as per census 2011) Urban: 34,33,808 (27.38%) Rural: 91,07,494 (72.62%) 889 10.35% Kashmiri, Urdu, Gojri, Pahadi & Dogri Male: 66,40,662 (52.96%) Female: 59,00,640 (47.04%) 67.16 24.6% (UPS approach) and 23.8% (UPSS approach) Total No. of Districts in J&K UT (20) Rice, Maize and Wheat. J&K is largest producer of Apple, Walnut, Almond and many other temperate dry and fresh fruits. Kashmir Division 1.Srinagar, 2. Ganderbal, 3. Budgam, 4. Baramulla, 5. Bandipora, 6. Kupwara, 7. Anantnag, 8. Kulgam, 9. Pulwama, 10. Shopian Jammu Division 1. Jammu, 2. Samba, 3. Udhampur, 4. Reasi, 5. Kathua, 6. Doda, 7. Ramban, 8. Kishtwar, 9. Rajouri, 10. Poonch Total No. of Blocks In J&K UT (285) Kashmir Division: 137 Jammu Division: 148 Lead Banks in J&K UT J&K Bank (12 districts): All 10 districts of Kashmir division viz. Srinagar, Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama and Shopian and two districts of Jammu Division viz. Rajouri and Poonch. State Bank of India (8 districts): Eight districts of Jammu division, viz. Jammu, Samba, Udhampur, Reasi, Kathua, Doda, Ramban and Kishtwar Public Sector Private Sector Banking Sector Performance as on Dec 31, 2021 Banks 12 11 Total Deposits Total Advances CD Ratio (Amount in INR millions) 1526929.0 842214.9 55.20% Note: Information as per Census 2011 Figures as available from JKUTLBC RRBs Co-op. Banks Other Total 10 2 37 Advances to Priority Sector Share of P.S. Adv. To Total Adv. 365639.4 43.41%#6Highlights - Dec 2021 J&K Bank ✓ One of the oldest Private Sector Bank. Founded 1938. ✓ ✓ Government of Jammu & Kashmir share holding of 70.12% | Listed on BSE & NSE Number of Branches: 974 BUS #, 1394 ATMs & 25 Extension Counters. ✓ Largest presence JKUT - Network of 811 BUS, 1247 ATMs, Market Share of 64% in Advances 63% in Deposits and 40% in Branches ✓ Total Business: INR 1776.6 Billion.; Deposits: INR 1092.9 Billion. Net Advances: ✓ INR 683.6 Billion. Net Profit of INR 1739.5 million in Q3; INR 3893.6 million in 9-M period FY 2021-22. ✓ Capital Adequacy Ratio(CAR) is 12.38%. Founded: 01 October, 1938 Headquarters: Owner: Srinagar, Jammu and Kashmir J&K Government (70.12%) Listed Company, traded as; Website: NSE: J&KBANK | BSE: 532209 www.jkbank.com Shareholding Pattern 31 Dec'2021 1.65 1.96 2.6. Gross NPA: 8.93%; Net NPA 3.02% NPA Coverage Ratio: 81.45%. ✓ CASA ratio: 56.32%. (among best in industry)@ Credit Deposit Ratio: 62.55%. Workforce of 13,044 employees; average business per employee INR 133.7 Million. 23.67 ✓ ✓ Designated as RBI's agent for carrying out Govt. Banking Business for JKUT & Ladakh UT. Designated as Lead Bank in 12 Districts of JKUT. J&K UTLBC Convenor Bank. ✓ Sponsor Bank of one R R B (J&K Grameen Bank) & Holding Company of JKBFSL. Corporate Agency tie-up with PNB Metlife (Life Insurance), Bajaj Allianz & IFFCO Tokyo (General Insurance). Reviewed Dec'2021 figures @Source: RBI database # BUs include 5 Impaired Asset Branches 70.12 Government of J&K Indivisuals Bodies Corporate Indian Financial Institutions Others 5#7Dominance of J&K Bank in JKUT INR Million JKB Share in J&K (Dec-2021)* Regional Dominance • 811 Branches / 1247 ATMs in J&K UT • Branch in every block of J&K UT and Ladakh UT • Over 10 Million account holders in J&K UT • Captive Clientele - J&K / Ladakh Government Employees & Pensioners • Lead Bank responsibility in 12 districts of J&K UT • Designated as UTLBC Convener for J&K UT • Business Share of ~63% in J&K • CD Ratio of 56% in J&K UT 37% JK Bank Other SCBS 36% 37% 63% 64% 63% J&K Bank Deposits Advances Total Business J&K UT JK Bank Other SCBs Deposits 964773.3 562155.7 Total 1526929.0 Advances # 541508.2 300706.7 842214.9 Branches ATMs 811 1205 2016 1247 1365 2612 * Source: JK UTLBC data for Dec'2021 Including Corporate sector Advances= 4990.7 Million & Technical Write-Off = 3546.4 Million#8J&K Bank - Brief Financial Profile INR Million J&K Bank Particulars FY 2020-21 Capital 713.6 Reserves 67542.5 Deposits 1080611.5 Advances 668417.3 Investments 308142.4 Total Assets 1202919.5 Q1'2022 713.6 68585.7 1056888.9 667795.2 300749.2 1183476.5 Total Income 88300.8 22114.8 Q2'2022 933.0 76342.1 1062673.5 683418.4 273729.4 1198304.9 22012.6 Operating Expenses 28785.4 7921.2 8566.0 Net Profit 4321.2 1043.2 1110.9 1739.5 Gross NPA 69547.5 69637.3 65248.7 65088.0 Net NPA 19693.3 19651.7 20636.5 20677.6 Gross NPA % 9.67 9.69 8.95 8.93 Q3'2022 933.0 933.0 78081.6 78081.6 1092984.0 1092984.0 683659.4 683659.4 295245.1 295245.1 1238094.0 1238094.0 21759.8 65887.3 8343.2 24830.4 3893.6 65088.0 20677.6 8.93 9 Months Geographic Distribution (Dec'2021) Region J&K UT Rest of India Total Gross Advances 532968.4 195953.2 728921.6 Advances % 73% 27% 100% Deposits 964773.3 128210.7 1092984.0 Deposit % 88% 12% 100% Net NPA % 2.95 2.94 3.02 3.02 3.02 Branches 811 163 974 NPA Coverage Ratio 81.97 82.00 81.57 81.45 81.45 (%) Branch % 83% 17% 100% NIM % 3.64 3.62 3.65 3.74 3.67 Return on Assets % 0.38 0.09 0.09 0.57 0.43 ATMs 1247 147 1394 Capital Adequacy 12.20 12.01 12.80 12.38 12.38 Ratio % ATM % 89% 11% 100% Cost to Income 64.11 66.55 72.34 72.58 70.46 Ratio (%)#9PERFORMANCE ANALYSIS PAST PERFORMANCE AND COMPETITIVE BENCHMARKING#10Key Performance Indicators Steady Developments Leading To... INR Million J&K Bank ...Gradually Improving Parameters (Q3'FY21-22) Non Interest Income Net Interest Income Operating Profit KPIs Q4'20-21 Q1'21-22 Q2 '21-22 Q3 '21-22 ROE (%)# 5.55 1.77 1.75 2.54 9932 1562 3152 ROA (%)# 0.27 0.09 0.09 0.14 CoF (%) 3.89 3.79 3.78 3.77 NIM (%) 3.43 3.62 3.65 3.74 Gross Advances Deposits Total Business EPS (INR)# 4.43 1.46 1.49 1.86 CAR (%) 12.20 12.01 12.80 12.38 728921 1092984 1776643 Gross NPA 69547.5 69637.3 65248.7 65088.0 GNPA (%) 9.67 9.69 8.95 8.93 EPS CASA Ratio PCR CRAR Net NPA 19693.3 19651.7 20636.5 20677.6 T1 10.97% NNPA (%) 2.95 2.94 3.02 3.02 1.86 56.32% 81.45% 1.41% T2 PCR (%) 81.97 82.00 81.57 81.45 12.38% CASA (%) 56.84 55.83 55.34 56.32 Up 0.94 YoY Up 188 bps YoY Down 222 bps YoY Up 61 bps YoY # Non-Annualized#11Key Performance Indicators Income Statement Q3 & 9M (FY2021-22) INR Million Balance Sheet Dec. 2021 J&K Bank Particulars Q3 2020-21 Q3 9M 9M 2021-22 2020-21 2021-22 Change % Particulars Dec 20 Mar'21 Sep'21 Dec'21 YoY % Assets (Total B.S) 1159977.5 1202919.5 1198304.9 1238094.0 7% Net Interest Income 10051.3 9932.9 28533.6 29357.3 3% Advances (Net) 665453.2 668417.3 683418.4 683659.4 3% Non-Interest Income 2716.5 1562.2 5409.0 5882.0 9% Investments 283322.0 308142.4 273729.4 295245.1 4% Operating Income 12767.8 11495.1 33942.6 35239.3 4% Fixed Assets 20104.8 20124.1 19764.9 19649.6 -2% Operating Expense 7133.1 8343.2 20973.8 24830.4 18% Paid Up Capital 713.6 713.6 933.0 933.0 31% Operating Profit 5634.7 3151.9 12968.8 10408.9 -20% Reserves and Surplus 64384.9 67542.5 76342.1 78081.6 21% Provisions & 4576.1 82.0 10489.0 4167.1 -60% Contingencies Borrowings 20162.9 20152.0 20141.0 20130.1 0% Deposits 1038042.3 1080611.5 1062673.5 1092984.0 5% Provision for Tax 399.2 1330.4 1316.1 2348.2 78% Profit After Tax 659.4 1739.5 1163.7 3893.6 235% JK Advances (Gr) 484221.2 JK Deposits 918423.9 497625.0 526199.5 532968.4 10% 950373.3 937208.1 964773.3 5% • Credit growth of over 10% in UTs of Jammu & Kashmir and Ladakh despite Covid effect. Lower growth in deposits owing to withdrawal of some Government Deposits. 10#12Historical Performance Parameters Profit & Loss INR Million J&K Bank Balance Sheet Year ended Year ended Year ended 9M ended Particulars Particulars Year ended Year ended Year ended Mar' 19 DEC' 21 Mar' 20 Mar' 21 Mar' 19 Mar' 20 Mar' 21 DEC' 21 Capital 557.0 713.6 713.6 933.0 Interest Income 76755.6 84462.9 81110.9 60005.3 Reserves & Surplus 65704.0 63221.2 67542.5 78081.6 Interest Expense 42916.3 47396.2 43403.1 30648.0 Deposits Net Interest Income 33839.3 37066.7 37707.8 29357.3 Advances Non-Interest Income 8126.3 5459.2 7189.9 5882.0 Investments 896389.0 977882.3 1080611.5 1092984.0 662715.1 643990.7 668417.3 683659.4 231605.0 230522.4 308142.4 295245.1 Net Total Income 41965.6 42525.9 44897.7 35239.3 Total Assets (BS size) Total Business Operating Expenses 24786.6 27275.4 28785.4 24830.4 Gross NPA's Operating Profit 17179.0 15250.5 16112.3 10408.9 Net NPA's 1014062.9 1088721.0 1202919.5 1238094.0 1559104.1 1621873.0 1749028.8 1776643.4 62213.5 76716.3 69547.5 65088.0 32396.1 22438.2 19699.3 20677.6 Provisions & Contingencies 10581.7 26251.0 10771.6 4167.1 No. of Branches 940 955 955 974 Provision for Tax 1948.5 393.6 1019.5 2348.2 No. of ATMs 1291 1354 1383 1394 Net Profit 4648.8 -11394.1 4321.2 3893.6 Personnel 12604 12623 12307 13044 11#13Historical Performance Parameters.... Cont... Interest Spread/Margins 9.38% 9.48% 8.54% 8.35% 4.98% 4.96% 4.10% 3.6... Capital Adequacy/Asset Quality 12.46% 12.20% 12.38% 11.40% 9.67% 8.97% 10.97% 8.93% 4.89% 3.84% 3.92% 3.64% 3.67% 3.48% 2.95% 3.02% FY 18-19 FY 19-20 FY 20-21 9M 21-22 FY 18-19 FY 19-20 FY 20-21 9M 21-22 -NIM -COD YOA GNPA -Net NPA CAR J&K Bank 12#14Historical Performance Parameters Cont. Book Value Per Share (INR) Return on Equity 75.65 60.81 82.04 74.46 FY 18-19 FY 19-20 FY 20-21 9M 21-22 BVPS Return on Assets 0.49% 0.43% 0.38% FY 18-19 FY 19-20 FY 20-21 9M 21-22 -1.10% 7.27% 10.15% 7.68% FY 18-19 FY 19-20 FY 20-21 9M 21-22 -19.96% Cost to Income Ratio 70.46% 64.14% 64.11% 59.06% FY 18-19 FY 19-20 FY 20-21 9M 21-22 J&K Bank 13#15Income & Expenditure Highlights Income Highlights Q3/9M Dec 2021 INR Million Expense Highlights Q3/9M Dec 2021 J&K Bank Interest Income Q3 FY'22 Q3 FY'21 9M 9M Change FY'22 FY'21 % Interest Exp Q3 FY'22 Q3 FY'21 9M FY'22 9M FY'21 Change % Loans And Advances Investments 15345.0 15764.7 45180.4 46336.9 4087.9 4258.0 12429.6 12910.1 -2% Deposits 9764.5 10212.4 29148.5 31561.1 -8% -4% Borrowings 3.2 Balance with RBI and 3.2 8.8 10.0 -12% Other Banks 761.9 740.7 2389.7 2348.0 2% Others (Subordinated Debt) Others 497.0 496.8 1490.7 1490.6 0% Total 2.9 0.3 5.6 0.3 1767% 20197.7 20763.7 60005.3 61595.3 -3% Total 10264.7 10712.4 30648.0 33061.7 -7% Q3 Non-Interest Income FY'22 Q3 FY'21 9M FY'22 9M Change FY'21 % Non-Interest Exp. Payment for Q3 FY'22 Q3 FY'21 9M FY'22 9M Change FY'21 % Commission/Exchange Employees 6118.0 282.9 468.9 928.9 1070.8 -13% Insurance Commission 163.2 122.5 414.2 316.4 31% Other Expenditure Total 2225.2 5044.8 2088.3 8343.2 7133.1 18216.1 15143.8 20% 6614.3 5830.0 13% 24830.4 20973.8 18% Treasury/Trading • Income 59.0 1495.3 1355.6 2545.3 -47% Miscellaneous Income 1057.1 629.8 3183.3 1476.5 116% Total 1562.2 2716.5 5882.0 5409.0 9% Cost of deposits further moderated to 3.66% for 9-M period'22 (PY 4.21%) resulting in lower interest expense. Distinguishable growth in income from Insurance distribution business. Non-Interest income lower due to drop in Treasury income 14#16Income & Margins Highlights Net Interest Income 10051.3 9174.2 INR Million Net interest margins (%) 9932.9 3.88 9692.9 9731.4 3.74 3.65 3.62 3.43 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 Cost of deposits (%) Yield on advances (%) 4.04 8.85 3.78 3.67 3.66 3.65 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 8.44 8.29 8.34 8.05 Q3 20-21 Q4 20-21 Q1 21-22 Q2 21-22 Q3 21-22 Reducing Cost of Deposit, NIM at satisfactory levels J&K Bank 15#17Liability Trends Deposit Mix 466362 477368 472893 466848 474596 475540 453356 469943 472401 483552 CASA Ratio (%) 54.44 INR Million J&K Bank 56.84 56.32 55.83 55.34 111793 138708 120096 115675 126063 Q3 20-21 Q4 20-21 Q1 21-22 ■Demand Deposits ■Savings Deposits Q2 21-22 ■Term Deposits Q3 21-22 Q3 20-21 Q4 20-21 Q1 21-22 CASA + Retail term Deposits (%) Q2 21-22 Q3 21-22 • Sustained improvement in CASA, at 56.32% (among the best in industry)@. Share of CASA & Retail Term Deposits at all time high of 87.22% • Demand Deposit component growth YoY 13%. • Main contributor of deposits in JK UT, 88% share. • Proportion of CASA deposits improving in rest of India. 84.42% • Liquidity Coverage Ratio: over 300% (well above regulatory requirement). Q3 FY2021 @ Source: RBI Website / Database 87.22% 86.46% 86.58% 86.39% Q4 FY2021 Q1 FY2022 Q2 FY2022 Q3 FY2022 16#18Liability Trends . Highly Diversified and Stable Liability Franchise. • Top 20 depositors contribute just 8% of total deposits. • Inter-bank deposits less than 1.50%. Rest of India High roll over of maturing Term Deposits and insignificant premature withdrawals adds to stability of the deposits portfolio. Distribution-branches and deposits 163 128210.7 JK UT 811 964773.3 INR Million Maturity Profile Of Term Deposits 39103, 8% 26998, 6% 58534, 12% 0 to 1 year ■1 to 3 years J&K Bank 352749, 74% 3 to 5 years 5 years & Above Region wise Deposit Mix as on 31 Dec, 2021 Rest 21% 16% 63% UT Ladakh JK UT 0% 90 51% 47% 20% 40% 11% 21% 28% 43% 60% 80% 100% Savings Demand Time 17#19Loans & Advances - Asset Quality & Diversification 61% of Standard rated Corporate Loan portfolio rated 'A' & Above. INR Million ADVANCES REGION WISE • Retail Advances constitute 68% of total Loan Book; Retail growth @ over 10% YOY . Personal Loans constitute 52% of Retail Book and 35% of Total Loan Book. . JK UT contributes 76% of the Loan Book (Net Advances). • J&K portfolio mostly granular / retail in nature. • • . Term loans contribute 66% of the credit portfolio while CC/OD & bills together account for 34%. Low Concentration: Top 20 borrowers account for < 13% of Total Loans. Out of the total Unrated Corporate PF, about INR 18000 Mio guaranteed by Central/UT Government. 167324, 24% Rating Profile- Standard Corporate Loans 516334, 76% Advances Mix Region wise J&K Bank JK UT Rest of India Bank 12% 12% 37% 11% 26% 3% ■AAA ■AA A ROI 3% 6% 16% 5% 68% 3% 11972, 8% BBB (a) BB&BELOW Unrated JK UT 15% 14% 45% 13% 11% 2% Total Standard 24670, 17% 34165, 23% Corporate Loans: INR 147269 37577, 26% Mio (Dec'2021) 10654, 7% 28231, 19% AGRICULTURE TRADE PERSONAL SME ■CORPORATE ■ OTHERS 18 Rol = Rest of India i.e other than JK UT @ Agriculture includes all Advances to this sectorirrespective of amount (i.e. it also includes Loans above INR 50 Million#20Loans & Advances - NPAs Non-Performing Assets - Movement INR Million Q3 Particulars FY'22 Q3 FY'21 9M 9M FY'22 FY'21 • % Change Balance at the start of the period 65248.6 63170.9 69547.5 76716.3 -9% • Additions during the period 8030.6 251.7 21202.1 1091.0 1843% Up gradations during the period 7156.2 463.8 15019.7 1510.2 895% Write off (including Tech Write-off) 19.7 13.4 7606.7 12154.1 -37% . Compromise Settlements 64.3 86.5 173.3 181.4 -4% Other Recoveries 951.1 Balance at the close of the period 898.3 2861.9 2000.8 65088.0 61960.6 65088.0 61960.6 43% 5% NPAs & Provisions • PARTICULARS JUN'21 SEP'21 DEC'21 Gross NPA 69637.3 65248.7 65088.0 Provisions for NPAs 49385.4 43744.2 43497.2 • DIFV, ECGC, Int. Capitalization 600.2 868.0 913.2 Net NPA 19651.7 20636.5 20677.6 * TWO = Technically Written Off J&K Bank Last year (9M'21) slippages were low due to Covid Moratorium / Hon'able Supreme Court Order. During the 9M-period INR 7580 Mio NPA technically written off (9M FY'21 INR 12035 Mio ). Total stock of TWO* as on 31.12.2021 = INR 46381 Mio Top 10 TWO accounts aggregate to INR 24952 Mio Gross NPA below 9% & net NPA just a shade above 3% with PCR of 81%. Top ten NPAs account for INR 29571 Mio (45% of NPA portfolio) with provisions coverage of 80%. 28 cases are pending for resolution through NCLT, Total Amount- INR 25892 Mio with provision coverage of 96%. 19 Accounts under Liquidation process amounting to INR 14924 Mio (100% Provision) 19#21NPA Sector Wise Non-Performing Assets - Sector Wise Breakup as on 31.12.2021 INR Million J&K Bank • Gross Exposure Gross Sector Advances % NPA GNPA % • Personal Finance 270407.1 37.10% 3574.0 1.32% Trade 96673.9 13.26% 7049.0 7.29% Agriculture 86213.1 11.83% 5398.7 6.26% Services 75073.2 10.30% 10784.5 14.37% • Manufacturing 9M slippages in J&K INR 14063 Mio; Rol INR 7139 Mio Gross NPAs in J&K INR 27171 Mio; Rol INR 37917 Mio • JK GNPA ratio 5.10%; Rol 19.35% • NPA Breakup - Sub-Standard INR 13108 Mio (20%); Doubtful INR 37638 Mio (58%); Loss INR 14342 Mio (22%) Top NPAS include 66414.2 9.11% 9258.1 13.94% • IL&FS INR 12926 Mio Infrastructure 62522.3 8.58% 13192.7 21.10% • Aircel INR 3296 Mio Financial Markets 33181.5 4.55% 11597.6 34.95% • KSK Mahanadi INR 3035 Mio Real Estate • 23311.8 3.20% 4094.5 17.56% Against Cash Collaterals 10273.9 1.41% 34.1 0.33% Others 4850.6 0.67% 104.7 2.16% Bharat Hotels INR 1940 Mio Sgr-Banihal Expressway INR 1931 Mio Paradise Avenue INR1581 Mio TOTAL 728921.6 100% 65088.0 8.93% 20#22Loans & Advances - Restructured Loans Restructured Loans - Dec'21 INR Million Sector-wise re structured Loans - Dec'21 J&K Bank Particulars Standard NPA Total Restructured 5000 J&K 4000 Amount Prov. Amount Prov. Amount Prov. 3000 Flood 2014 Unrest 2016 368.6 36.9 4980.7 3702.0 5349.3 3738.8 2000 Rehab-2019 1699.0 173.9 65.9 9.5 1764.9 183.4 1000 0 Resolution Framework 1 & 2 4401.3 647.8 21.2 3.4 4422.5 651.2 Others 1485.6 146.7 4427.0 3059.8 5912.5 3206.5 AGRI MFGN REALE SERVC TRADE OTHERS Standard 1520.3 2459.5 947.6 3571.8 4174.4 2184 ■NPA 1255.9 3363.8 1985.7 4240.1 1289.1 4888.7 Standard ■NPA TOTAL J&K 7954.5 1005.2 9494.8 6774.8 17449.2 7780.0 Rest Resolution Framework 1 & 2 5124.0 755.6 1946.9 428.5 7070.9 1184.1 Others TOTAL REST 1779.2 176.1 5581.8 3651.0 7361.0 3827.1 6903.2 931.7 7528.7 4079.5 14431.9 5011.2 GRAND TOTAL (BANK) 14857.6 1936.9 17023.5 10854.3 31881.2 12791.2 • 93% of JK (Flood 2014 & Unrest 2016) Restructured portfolio already classified as NPA Standard restructured portfolio remaining as on 31.12.21 is INR 14858 Mio (mostly on account of recent Covid-19 restructuring) against which 13% provisions are held. New restructuring during 9M'FY22 (Covid, RF 1-2) is INR 13674 Mio 21#23Investment Book Investment - Dec' 21 15644.1 Dec'31,20-21 9515.0 Dec'31,21-22 NON SLR SECURITIES SLR NPIS: INR 7128 Mio 267677.9 Prov. Ag NPIs: INR 6364 Mio Coverage 89% Duration (Yrs) - Investment Portfolio Dec'21 INR Million B&D - Rating Profile in Percent (Dec'21) 8.46% J&K Bank 285730.1 * Investment predominantly in SLR securities; 97% 18.18% AAA 55.67% 17.69% AA A BB & Below Yield (%) - Investment Portfolio (Qr Dec'21) 5.93 5.84 * HTM 75%; 2.58 2.09 0.59 AFS 25% HTM Portfolio HFT Portfolio AFS Portfolio Overall Portfolio B&D= Bonds & Debentures; HTM = Held till Maturity; AFS= Available for Sale; HFT = Held for Trade 2.49 5.64 SLR Securities Non SLR Securities Total Portfolio 22#24Capital Position CRAR & Components of Capital INR Million Recent Capital Infusion by J&K Govt J&K Bank Component FY 18-19 FY 19-20 FY 20-21 DEC'21 FY Shares Issue Price (INR) Amount CET-I % 9.13 8.42 8.82 9.58 2016-17 36555051 68.39 2500.0 Tier -I % 10.60 9.88 10.28 10.97 2017-18 35525321 79.38 2820.0 Tier -11 % 1.86 1.53 1.92 1.41 2019-20 156592546 31.93 5000.0 CRAR % 12.46 11.40 12.20 12.38 2021-22 167672702 29.82 5000.0 CET - I 62137.2 57734.2 60793.7 68982.0 AT - I 10000.0 10000.0 10000.0 10000.0 Tier - II 12649.5 10472.9 13229.0 10174.8 Total Capital 84786.7 RWA 680485.8 78207.1 685862.3 84022.7 688928.6 89156.8 720304.4 • . CET-I = Common Equity Tier I; AT-I = Additional Tier I; RWA = Risk Weighted Assets CRAR up by 61 bps YoY on account of internal accruals FY'21 (INR 4321 Mio), Infusion by JK Gov (INR 5000 Mio) & ESPS (INR 1500 Mio). Revaluation Reserves partly reckoned for T1 and partly for T2. Floating Provisions of INR 3487 Mio reckoned for Tier-2. Further Avenues for Capital Augmentation • J&K UT Government has made budgetary allocation for further Capital Infusion (INR 8000 Mio) for FY 2022 • Bank is coming out with bond issue for raising Tier-II (INR 5000 Mio) during this FY •Follow-up Public issue / QIP (INR 5000 Mio) is being pursued in Q4 of FY'22. • Recovery / Settlements of significant NPAs shall release substantial provisions. • Retaining major portion of future profits. 23#25DIGITAL JOURNEY 24#26ACCLERATING DIGITAL DELIVERY Mpay More than 1.3 Million M-pay Customers with a YOY growth of 22%. New user-friendly M- Pay Delight App launched with multiple features. About 83K and 38L Credit and Debt card users with an average spend of Rs. 41K on credit cards. Credit/Debit Cards 900 About 60% of the total transactions are carried through digital channels. Digital Transactions About 89% of CASA Accounts are opened through Central Processing Centers. Account Opening J&K Bank 25#27Digital Channels - THE WAY AHEAD J&K Bank J&K Bank Loyalty programs for customers to promote digital and alternate channels Interactive Phone banking services like SMS, Missed Call banking etc. WhatsApp messaging and chat bots EMI on debit cards Contact less debit and credit cards TAB Banking 26#28FUTURE STRATEGIES Sustained growth & Profitability 27#29Overall Business Strategy 1 Business Plan • • 2 • • • Adoption & implementation of 3 - 5 year business plan Product strategy and roadmap on various business offerings Capital planning in line with the five year business plan Business Process Re-Engineering Identifying high-impact processes for optimization and re-engineering Maximizing IT intervention in business processes Define sales and marketing structure and associated processes 3 Digital Transformation • 4 Strategy for digital penetration and increasing usage Revisit of IT landscape and suggest transformation level HR Strategy and Organizational Transformation • . • . 5 Revisiting the overall organizational structure HR Strategy including manpower planning, career development, trainings, performance management and succession planning Defining of job roles Competence requirements and mapping with job roles Compliance Review of gaps in Compliance function and processes, and bring improvements therein; Target Regulatory Rating of 'B' J&K Bank 28#30Potential Business Opportunities Home Loan Bank has opened 10602 fresh housing loan accounts during FY 2020-21 with a YoY growth of 19%. Keeping in view the potential of housing loan bank is targeting a growth of 25% during FY 2021-22. Bank envisages to open more than 13000 fresh accounts under this segment during FY 2021-22. Agri & Allied Under agriculture sector, bank has opened 257 thousand fresh loan accounts during FY 2020-21 at a yearly growth of 10%. Bank has a good opportunity of lending to farmers in J&K under KCC Scheme and lending under Agriculture Infrastructure Fund for setting up of cold stores and chains, warehousing, silos, assaying, grading and packaging units, e-marketing points linked to e-trading platforms and ripening chambers, besides PPP projects for crop aggregation sponsored by central/state/local bodies. MSMES J&K Bank More than 400 thousand fresh accounts opened during FY 2020-21 under MSME advances with yearly growth of 13%. A growth of 17% targeted for FY 2021-22. Under this sector bank has scope in manufacturing and service activities in food processing, pharmaceuticals, high grade raw material, woolen fabrics, computer/electronics and information technology. High potential in Education, Tourism, Health etc. Govt. Employees Bank has a huge customer base of Govt employees/Govt pensioners. Bank envisages a good opportunity to up-sell and cross sell under various segments to the Govt employees/pensioners viz personal consumption, housing, car, CC employee, credit cards etc. Car Loan Around 30 thousand car loan accounts opened during FY 2020-21 with a yearly growth of 19%. Bank is targeting a growth of around 25% during FY 2021- 22. Digital POS. Digital Contactless Debit and Credit Cards. Card tokenization. Cardless ATM usage. Domestic Prepaid Cards. Non internet Based phone banking services like SMS, Missed Call etc. Whatsapp messaging and chatbots. Opportunity to on-board the hospitals, schools, colleges etc. in the UT of J&K and Ladakh on IPG/POS platforms. 29#31J&K Bank J&K BANK - A VALUE PROPOSITION 30#32Investment Rationale One of A Kind Bank J&K Bank - ■ Unique blend of Commercial Bank, Development Financial Institution & Financial Services provider Private sector bank despite J&K Government's majority holding (~70%) Designated as RBI's agent for carrying out banking business for the Government of J&K UT and Ladakh UT Designated by Central Government for implementation of various flagship programs in J&K First private sector bank assigned lead bank responsibility in J&K UT Conducts major portion of banking business of Central Government in J&K; Collection Agent for utility services in J&K A Regional Goliath The dominant bank in J&K and Ladakh with 811 & 36 branches, 1247 & 49 ATMs respectively in the two UTs, thus covering the entire 2 UTs with branches in every block Serves a large community of approx. 12.5 million population, with 10.0 million account holders in the Bank Inherent strength in terms of its dominant position in J&K remains intact, with 64%* business share in the UT Diversified Business Portfolio J&K Bank Financial Services Ltd., the wholly owned subsidiary of the Bank, provides depository services and offers stock broking services Distributor of life insurance products of PNB MetLife, and general insurance distribution partner for Bajaj Allianz & Iffco Tokyo. Sponsor of J&K Grameen Bank (Regional Rural Bank) Improved Asset Quality and Return Ratios 剑 • With improvement in business environment, overall asset quality to be stable with slippage control and better recovery Most of the problematic or low rated corporate accounts already downgraded with significant provision coverage Bank expects credit cost to moderate to -100 bps in FY 2022, thus improving RoA / ROE Persistently Improved Valuation A Management is focused on purging the balance sheet, growing the J&K business and monitoring / resolving problematic assets outside the home turf Improvement in income visibility due to margins uptick, cost control, peaking out of balance sheet stress and improved outlook on resolution - all leading to a persistently improved valuation * UTLBC Data 31#33Thank You. 32