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.
M Y Khan, chairman, said: "We are looking at a foreign equity investment of 10 to 15 per cent once the bank's share price rises. We are looking 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," Khan said.
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 corporate portfolio from ICICI. The bank had last year taken over the Srinagar branch of StanChart Grindlays for around Rs 2 crore. "We are open to take over additional portfolios," added Khan.
J & K Bank is planning to concentrate on the 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 said.
The bank has a Rs 150 crore personal loans portfolio. Khan said, "This portfolio was build up in the last one year mainly through loans to government employees. The bank has 1,50,000 government salaries accounts. By being the banker to the state, the bank also gets a float of Rs 1,000 crore. The float is likely to improve because of additional power projects which are coming up in the state."
