Big banks such as State Bank of India are still struggling to recover their loan from the grounded Kingfisher Airlines, but one small bank has made a smart move and got back most of its loan.
The J&K Bank took advantage of the United Breweries-Diageo deal and has managed to recover Rs 90 crore out of the Rs 100-crore loan exposure to the airline.
“After declaring the Kingfisher account as a non-performing asset, when talks on the UB-Diageo deal were on, we triggered sale for pledged UB shares. We sold at Rs 1,880 a share and recovered Rs 90 crore,” Mushtaq Ahmad, Chairman and CEO, J&K Bank, told visiting journalists here.
Now, the bank aims to make a provision for remaining Rs 10 crore during the quarter ended September 30. It also needs to provide for loan account of Deccan Chronicle, which has turned a non-performing asset. The bank lent Rs 50 crore to the Hyderabad-based media group, for which a provision of Rs 25 crore has already been made and the rest will be provided in the balance-sheet for the second quarter.
International foray
J&K Bank plans to approach the Reserve Bank of India for going international.
“We should be going to London and Dubai first. It will take two years to start these branches,” Ahmad said. On the domestic front, the bank plans to add 20 branches in Kerala, Karnataka, Mumbai and Gujarat during this year. Currently, it has more than 750 branches.
J&K Bank has set a target of Rs 1.25 lakh crore for the current fiscal against nearly Rs 1 lakh crore in 2012-13.