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The drop was primarily due to higher provisioning, which rose about seven-fold to Rs 246.7 crore from Rs 36.2 crore in the year-ago period. In the March quarter, provisioning stood at Rs 60.6 crore.
"Maintaining a strong and clean balance sheet necessitated higher provisioning during the first quarter...This led to a sharp dip in our profits," said chairman and chief executive Mushtaq Ahmad.
During the June quarter, gross non-performing assets (NPAs) increased to 4.2 per cent from 1.7 per cent a year earlier. Net NPAs stood at 2.2 per cent, a year-on-year rise of 204 basis points.
"Asset quality pressures on banks didn't abate during the first quarter of this financial year. As such, banks had to go for higher provisioning on account of fresh slippages to the NPA category and addition to restructured assets," said Ahmad.
Net interest income, or the difference between interest earned and interest expended, declined 2.6 per cent to Rs 637.7 crore from Rs 655 crore in the corresponding quarter last year.
While deposits increased 8.6 per cent year-on-year to Rs 63,651.9 crore, advances rose 13.1 per cent to Rs 44,430.7 crore.
On Wednesday, the J&K Bank stock closed at Rs 1,498.4 on BSE, down five per cent.
