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| J&K Bank to assume global outlook | | Riding on interest income, Q3 net up 30% | | Early Times Reporter
Jammu | Oct 29
Two months after obtaining an approval from the Reserve Bank of India for setting up a stock brokering subsidiary, the Jammu and Kashmir Bank Ltd has launched a search for a foreign partner to expans its operations to South East Asia and Central Asia.
Country's first state owned bank with more than 500 branches the Jammu and Kashmir Bank Ltd which has recently become US Dollar One Billion company has announced financial results for the second quarter, reporting higher net profit on the back of significant rise in interest income on loans and advances and other income.
The J&K Bank is now scouting for a foreign partner to pick up 49 percent in its planned stock broking subsidiary. "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 said adding the bank would hold 51 percent in the venture.
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 percent of the bank's equity, he said. The bank, 53 percent owned by the state government, over the weekend announced a 30 percent rise in its quarterly net profit beating analyst forecasts.
"Our margins have been better," Drabu said. The bank's average yield on advances has gone up to 6.75 percent for the quarter, from 6.55 percent 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 percent.
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 percent against the national average of 40 percent.
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 percent of the total income by 2010, from the current 14-15 percent, he said. Shares in the bank were trading 2.2 percent up at 789.90 rupees in a firm Mumbai market. |
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