Jammu and Kashmir Bank slipped from its all-time high of Rs 165 to Rs 154 (2.07% below par), even though the bank's results were none too disappointing.

The scrip, in fact, had fallen even lower earlier to Rs 150.40 as the market reckoned with the fact that the bank's total income had actually declined. A total of 77,153 J&K Bank shares changed hands on BSE by 10:29 IST. In 26 sessions between 25 March and 5 May 2003, the scrip of the private bank rose 45.6% to Rs 157.25 from Rs 108.

For the fourth quarter ended 31 March 2003, J&K Bank posted a 19.5% rise in net profit to Rs 101.58 crore (Rs 1.01 billion) compared to Rs 85.01 crore in the corresponding period of the previous year. However, total income decreased by 10.6% to Rs 421.65 crore (Rs 4.21 billion) from Rs 471.60 crore (Rs 4.71 billion) for MQ 2002.

For the year ended 31 March 2003, the bank recorded a 30% rise in net profit to Rs 337.75 crore (Rs 3.37 billion) on a 6.4% increase in total income to Rs 1,714.56 crore (Rs 17.14 billion). A dividend of 60% for 2002-2003 has been recommended subject to approval from the Reserve Bank of India.

Analysts say that though total income has fallen the scrip is declining more on profit booking after a sustained rise witnessed over the last few days.

Also, pre-results expectations that the bank would issue a 1:1 bonus being belied, players are now selling here. However, analysts feel that after a brief correction, the stock will move higher following the heartening performance. The Union Budget's permitting foreign direct investment in private sector banks up to 74% from the earlier 49% should also vindicate this scrip.

Earlier there were reports that the bank may rope in a foreign strategic partner. But the bank has now made no such announcement. Earlier, J&K Bank had notified that it was on the lookout for a strategic investor, though no formal step had been initiated in that regard.

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.