Jammu & Kashmir Bank shares gain 4% on plans to raise funds

Shares of Jammu & Kashmir Bank gained nearly 4 percent on Wednesday after the lender said that it was planning to raise funds.

At a meeting scheduled on July 15, the bank’s board will review the proposal of raising capital, it said in an exchange filing on July 11. No clarity is given though on how the funds will be raised.

The bank’s shares were up 3.9 percent at Rs 71.85 at 10.54am on the National Stock Exchange. The shares have given 22 percent returns since January 1.

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Jammu & Kashmir Bank was fined Rs 2.5 crore by the central bank on June 22. The fine came after the lender did not ensure necessary steps to see if the data submitted to Central Repository of Information and Large Credit (CRILC) was accurate or not. CRILC collects and stores data on borrowers’ credit exposure.

The bank had sent messages through the SWIFT network without confirming if the transactions are accurately recorded in the Core Banking System (CBS) or not. Jammu and Kashmir Bank had granted loan to a corporation without confirming if the bank had the resources to pay back the debt.

Jammu & Kashmir Bank’s revenue grew 14 percent year-on-year to Rs 10,120 crore in FY23, while net profit grew almost 2.5 times to Rs 1,180 crore year-on-year in the same period. EBITDA margins in FY23 improved by 421 basis points.

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