J&K Bank may place 15% with foreign ally
Our Banking Bureau
24 July 2002

Mumbai: The Jammu and Kashmir Bank (J&K Bank) is looking at placing 10-15 per cent of its equity to a foreign ally through a preferential issue.

J&K Bank chairman M Y Khan says: “We are looking at a foreign equity investment of 10 to 15 per cent once the bank’s share price rises. We are expecting over Rs 200 a share, which is the book value of the scrip now.” The scrip closed at Rs 93 on the Bombay Stock Exchange.

The J&K government holds 53.15 per cent in the bank. “Once the preferential issue is made, the stake of the government will fall by 2 to 3 per cent to around 51 per cent. We will, however, ask the government to pump in fresh investments to keep its stake holding at the same level,” says Khan.

Alliance Capital has, in the last few months, bought around 2 per cent of the equity of the bank from the market.

The bank is planning to buy more than Rs 200 crore of the corporate portfolio from ICICI. Last year the bank had taken over the Srinagar branch of StanChart Grindlays for around Rs 2 crore. “We are open to take over additional portfolios,” says Khan.

J&K Bank is planning to concentrate on fee-based income in addition to its retail thrust. “We are looking at fee-based income through depository services, broking tie-up with other players, and insurance. In the fifth year, the bank plans to make around Rs 25 crore each through life and non-life insurance businesses,” he adds.

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