It may be recalled that the stock did not even react to an impressive result announced by the bank for the fiscal 1999. Even an impressive growth of almost 70 per cent in net profit and a non-performing assets of around 3.5 per cent for fiscal 1999 have failed change the market perception of this bank.

Apart from the general hammering of the banking stocks, the other main reason is that the bank is mainly operating from the troubled-torn state of Jammu & Kashmir. However, since the bank is now making a foray into mutual fund business, its operations will beoutside the state and the bottomline may get a boost. This has dramatically changed the risk perception towards the bank. Also, the bonus rumour has added to the current sentiment. On an equity base of Rs 47.8 crore, the bank has a huge reserve base of Rs 380.4 crore.

The bank has reported a net profit of Rs 85.20 crore compared with Rs 50.37 crore in the previous year. The deposits have grown by 32 per cent to Rs 6,439.88 crore and advances have increased to Rs 2,947.92 crore. The business turnover crossed Rs 9,400 crore, reporting growth of 32 per cent.

Khan said that there has been a significant decline in the level of non-performing assets at 3.5 per cent. The bank's investment portfolio has grown to Rs 2,957.11 crore as on March 31, 1999. The bank has marked to market 78 per cent of its portfolio.

The bank is venturing into mutual fund by setting up a separate company and has appointed Arthur Anderson as consultant. J&K Bank is the latest bank to make a foray into the mutual fund business. Theother banks who have announced to enter include - HSBC Bank and ANZ Grindlays. The bank is also expanding its branch networks across the country. The bank would be opening around 20 branches in 1999-2000 and 30 more in 2000-2001.