Srinagar, January 2: The Jammu and Kashmir Bank stock today scaled new heights on the bourses when it crossed the 1000 mark on the National Stock Exchange. Opening at the previous close of Rs 870.10, the stock witnessed a strong buyer interest all through the day taking the stock to a record 1005 mark before closing at Rs.934.35.
Analysts tracking the stock relate this phenomenal performance to the strong fundamentals of the bank and to the fact that the bank has been able to position itself uniquely in the Indian Banking sector.
 Since last couple of years when the bank stock was trading between 250-300, the bank has changed its business strategy by way refocusing its J&K state operations and developing a slew of financial products to cater to grossly under-serviced local economy.
This strategy has proved very successful and the bank has considerably increased its lending portfolio in the state. The hallmark of this strategy has not only been an increase in the advances of the bank but also a noticeable improvement in its margins and yield on advances. Apart from that, the bank has increased its NPA coverage ratio from just 48% three years back to 65% at the end of FY07.
It is also among many firsts in the banks history that it has come out with auditor’s qualification free balance sheets for two consecutive years depicting thereby a transparent  and much stronger balance sheet management.
All this, analysts opine, is responsible for the appetite for the stock among the top institutional investors all over the globe.
The bank stock which was fairly undervalued in the stock markets has now a PE ratio of 15.28 and the investment consultants are expecting it to increase further in medium term time horizon.
Meanwhile Dr. Haseeb A Drabu, Chairman and Chief Executive of the Bank, said, “Our mission is to empower the people of J&K. In the past we have tried to maximize profits without directly linking it to the impact on the welfare of the society as a whole. What we have now embarked upon now is the combination of the sensibility of the social enterprise with the form of a for-profit business.”
It is, however, worthwhile to note that apart from the huge gains the bank stock has made on the exchanges, its investor profile has also shown quite an interesting qualitative change. Earlier the bank stock was being held by a handful of foreign institutional Investors (FIIs) most of them being short term “hedge fund investors” but as on date more than 70 best-of-the-breed “long-on” investment houses are having the bank stock on their books.
Referring to the overwhelming interest that FIIs are showing in the Bank Dr. Drabu said, “Some of the biggest names in the world figure in the seventy plus funds that have invested in the Bank. The list is truly international, with funds from USA, Europe, Singapore, Japan, Sweden, Mexico and Spain on long term.”
Eulogizing the emotional attachment and trust that people of the state have vis-avis J&K Bank Dr. Drabu said, “As it is, J&K Bank is much more than a mere bank for the people of the state. Not only is it the most successful company of and from the state, it is a citadel of our civil society. Going beyond that, it is a testimony of the competencies of the people of the state in the building of a national institution.”