By 13:50 IST, the scrip of the private sector bank eased, but was still up by 4.88% at Rs 168.55 on the BSE. Earlier in the session, the scrip recovered from its low of Rs 159.05. Over 271,000 shares changed hands on counter. In 30 sessions, the scrip rose by 56% from Rs 108 on 25 March 2003.

Dealers said the rise in the J&K Bank scrip was due to rumours that the bank may declare a 1:1 bonus issue of equity shares, as well as on hopes that it would sell equity stake to a foreign strategic partner. Earlier, the bank had said that it was on the lookout for a strategic investor.

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) as 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 4.2 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 by the bank's board, subject to approval from the Reserve Bank of India.

J&K Bank is banker to the government of Jammu & Kashmir. As per the existing arrangement between the State government and the bank, all 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 the bank 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.