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| JK Bank scouts for foreign partner in broking unit | | | Early Times Reporter
Jammu | Oct 29
Jammu & Kashmir Bank is scouting for a foreign partner to pick up 49 per cent in its planned stock broking subsidiary, a top official said on Monday.
"We are looking for a partner with competence in research and who has good operations in South East Asia or Central Asia," Chairman, Haseeb A. Drabu told a wire agency in Mumbai adding the bank would hold 51 per cent in the venture. In August, the bank received the Reserve Bank of India's approval to set up a stock broking subsidiary.
It also plans to come out with its $100 million issue of global depositary receipts by mid-December, he said. "We will complete the process of appointing investment bankers and merchant bankers by November and hit the market by December."
The issue would comprise about 6 per cent of the bank's equity, he said. The bank, 53 per cent owned by the state government, over the weekend announced a 30 per cent rise in its quarterly net profit beating analyst forecasts.
It posted July-Sept net profit of Rs 108 crore on total income of Rs 654 crore. A Reuters poll of analysts forecast an average net profit of Rs 93.6 crore. "Our margins have been better," Drabu said. The bank's average yield on advances has gone up to 6.75 per cent for the quarter, from 6.55 per cent a year ago.
"The cost of deposit has gone up by 40-50 basis points," he said, and net interest margin has been 2.97 per cent. J&K Bank would continue to focus on Jammu & Kashmir as yields are better there than in other parts of the country, he said.
"We get about 400 basis points yield or interest rate arbitrage in J&K."
He also said the share of low cost deposit or CASA (current account and savings account) for the bank in its home state is 65 per cent against the national average of 40 per cent.
The growth in the Himalayan region is mainly coming from small and medium industries as they enjoy certain tax benefits, Drabu said. The bank plans to boost its fee income to 25 per cent of the total income by 2010, from the current 14-15 per cent, he said.
Shares in the bank were trading 2.2 per cent up at Rs 789.90 in a firm Mumbai market. |
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