Jammu and Kashmir Bank would sell non-performing assets of Rs 960 crores as part of its attempts to repair its balance sheet, according to bank sources.
According to the sources, the bank is seeking to finalise the sale of these non-performing assets to the National Asset Reconstruction Company Limited (NARCL) by the end of this month.
JK Bank has a Rs 230 crore exposure in the now-bankrupt Reliance Naval and Engineering Limited, a Rs 188 crore exposure in Jaypee Infratech, a Rs 176 crore exposure in Jaiprakash Associates Limited, and a Rs 126 crore exposure in Coastal Energen Private Limited.
The Rs 960 crore NPAs of Jammu and Kashmir Bank are part of the Rs 9,234 crore bad assets of Public Sector Undertaking (PSU) lenders that the NARCL has proposed to acquire at Rs 3,570 crore in the first phase.
The profits from the sale of NPAs, which the NARCL is undertaking on a 15-85 basis over a five-year period, would help Jammu and Kashmir Bank obtain capital for its expansion into markets outside the Union territory of Ladakh and Jammu and Kashmir.
To fund its development goals, the bank has set a target of obtaining Rs 1,000 crore in capital by the end of the current fiscal year.
Over the last five months, the bank has launched 27 new business initiatives, while gold loans are now accessible at 152 of its locations. It has also established satellite offices in Mohali, Lucknow, and Bengaluru.
The bank announced its second-quarter results earlier this week, with net earnings increasing by 119 per cent year on year to Rs 243 crore.
The bank’s strong success has been reflected in the price of its stock on the stock exchange. Over the last 30 days, the value of the JK Bank share has increased by 33 per cent.