J&K Bank continued a recent up trend as rumours are rife that the company will issue a bonus in the ratio of 1:1.
The scrip of the Srinangar-based commercial bank edged up 0.68% to Rs 133.25 on BSE as a result. The current level achieved by the scrip is close to its all time high of Rs 135.40 (on 22 January 2003). The scrip had touched an even higher Rs 134 in intra-day trades on Thursday. Its day's low, on the contrary, was Rs 131. Around 43,664 J&K Bank shares were traded on BSE by 12:10 IST.
Between 25 March and 16 April 2003, Jammu & Kashmir Bank (J&K Bank) had risen 22.5% to Rs 132.35 from Rs 108.
The market is rife with rumours that the private sector bank may propose an issue of bonus shares. The market expects the bonus to be in the ratio of 1:1. The scrip is also vindicated by talk that the bank plans to rope in a foreign strategic partner. Earlier, J&K Bank had notified that it was on the lookout for a strategic investor, though no formal step was initiated in that regard.
Besides, the Union Budget's permitting foreign direct investment limit in private sector banks at 74% from the earlier 49% has brought this bank in favour with the market.
For the third quarter ended 31 December 2002, J&K Bank posted a 34% growth in net profit to Rs 89.18 crore on a 15.3% increase in total income to Rs 398.75 crore (Rs 3.98 billion). Operating profit rose 35% to Rs 184.22 crore (Rs 1.84 billion) against Rs 136.54 crore (Rs 1.36 billion) in the corresponding period of the previous year.
Cumulative net profit for the nine-month period ended 31 December 2002 jumped by 35% to Rs 236.18 crore (Rs 2.36 billion) against Rs 174.79 crore (Rs 1.74 billion) during the same period of 2001. Cumulative operating profit for the nine-month period grew 39% to Rs 447.29 crore (Rs 4.47 billion) against Rs 321.78 crore (Rs 3.21 billion) in the same period during the previous year. Total cumulative income of the bank during the nine-month review period of 2002-03 stood at Rs 1292.91 crore (Rs 12.92 billion). The net worth of the bank recorded a 34% increase over the corresponding period of the previous year.
J&K Bank is banker to the state government of Jammu & Kashmir. As per the existing arrangement between the government and the bank, all state government department accounts are maintained with the bank. Also, all the budgetary and non-budgetary fund allocations of the state are routed through the bank. RBI has appointed it as its agency to conduct the Central government's business in the state, viz. collection of income tax. The bank, though classified as private, is 53% owned by the J&K government.
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