J&K Bank board okays strategic ally proposal

The board of Jammu & Kashmir Bank has given an in-principle approval for roping in strategic partners to participate in the bank's equity to the extent of 10 per cent in the post-issue capital.

The induction of strategic partners, however, will be subject to necessary approvals of the regulatory authorities and also concurrence of the government of Jammu & Kashmir for chipping in additional capital with a view to maintain their majority stake in the bank.

The Srinagar-based bank is reportedly in negotiations, among others, with foreign institutional investors such as Newbridge Capital, CDC Capital Partners, and Chrysalis for participating in its equity.

Currently, the government of J&K holds 53 per cent stake in the bank. Public and foreign institutional investors hold 21 per cent and 19 per cent stake, respectively.

The decision to bring in strategic partners was taken at the board meeting held on March 28, the bank informed the Bombay Stock Exchange today. J&K Bank scrip closed up 2.71 per cent today at Rs 515.15 on the Bombay Stock Exchange against Thursday's close of Rs 501.55.

The bank is planning to open overseas branches in Dubai, Kuala Lumpur, London and New York as part of its expansion. It has already applied to RBI for opening branches in Dubai and Kuala Lumpur.

As per its business plan for 2003-04, it was targeting to grow its business (deposits plus advances) to Rs 25,000 crore against Rs 22,000 crore in 2002-03. It also hopes to trim its non-performing assets to less than 1.0 per cent by the end of this fiscal from 1.58 per cent.