State-owned lender Jammu & Kashmir Bank reported a 32 percent rise in its fourth-quarter net profit, which lagged analyst estimates because of higher tax provisions, a top official said on Monday.

The bank earned net profit of 598 million rupees, up from 452.8 million rupees a year earlier. A Reuters poll of analysts had forecast a net profit of 816.33 million rupees.

The bank has set aside 990 million rupees for tax payments during the quarter, 77 percent higher than the year-ago period, Chairman, Haseeb A Drabu said.

The bank provided an additional 200 million rupees towards exceptional tax liability this year, accounting for the sharp increase, he said.

"These are tax liabilities of the past, of the previous year, that gets crystalised during the course of this year," he told Reuters from the bank's headquarters at Srinagar, the summer capital of the its home state, Jammu & Kashmir.

The bank's average yield on loans rose during the full year to 10.5 percent as compared to 8.5 percent last year, he said. "This negates the impact of the cost of deposits," he said.

The bank's average cost of deposits has increased to 5.5 percent from 4.5 percent a year earlier.

"The whole strategy of shifting to J&K has impacted the yield," he said. Over the past year, the bank has focussed its business in the Himalayan region, which now constitutes about 40 percent of its advances and 58 percent of its deposits, he said.

He also said the bank was looking at a loan growth of 30-35 percent during the year, including 40 percent growth in Jammu & Kashmir and 20 percent in the rest of India, he added.

The state's share in the bank's total loan book is expected to be 45 percent during the current fiscal, Drabu said. The bank's total advances was 188.82 billion rupees as of March, while total deposits stood at 285.93 billion rupees.

"Last three years, we had a very conservative loan growth, largely because we were operationalising our strategy of building retail portfolio in J&K and SME portfolio," Drabu said.