The stock of Jammu & Kashmir Bank Friday slipped 9.27 per cent to Rs 67.55 from the previous close of Rs 74.40. The stock of the bank in two consecutive days on Thursday and Friday tanked over 23 per cent.
On Thursday the stocked slipped 14.34 per cent to Rs 74.40 following anticipation of losses stated by the Bank management in next 2-3 quarters.
Notably, Parvez Ahmad, the new chairman & CEO of the bank while assuming charge on October 06 had stated in a crowded press conference held on October 10 that the bank's consolidation of balance sheet may take 4-6 quarters. He also said that the bank will not declare dividend for next two years.
According to the CNBC-TV 18, as situation in J&K state has not been good, the Bank's exposure of Rs 16,000 crore in the state of J&K alone is under stress. Out of which, the bank expects, a restructuring of close to Rs 10,000 crore of the book. J&K hopes that the Reserve Bank of India (RBI) will soften up restructuring guidelines as the state has been through variety of problems in the recent past. So, the bank is expecting 10-12 percent growth in the rest of India business.
"It is worthwhile to mention that J&K Bank has no plan to alter their J&K state strategy and will continue lending in the state. The bank, is in fact, planning to raise Rs 1000 crore of capital over the next two quarters. The bank has already taken consultants on board for restructuring of these assets," insiders said.
Banking experts are of the view that the move of the new chairman Parvez Ahmad to focus on consolidation and cleaning-up of mess in the balance sheet in coming quarters is a good move. "This is in line with the RBI guidelines where banks have been asked to clean up their balance sheets by March 2017. This is going to boost investors' confidence and good days are definitely ahead for them," they said.