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vishal.sahay
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Quote vishal.sahay Replybullet Topic: Jammu & Kashmir bank - As good as the Place
    Posted: 23/Sep/2007 at 4:30pm

Any idea on Jammu & Kashmir bank?



Edited by basant - 04/Nov/2007 at 8:33am
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Quote basant Replybullet Posted: 23/Sep/2007 at 4:38pm
Good, well managed bank. One of the advantages is that the Govt of JK banks with JK Bank whereas it is the SBI in other states so this bank has a truckload of low cost deposits.But this is not a take over story because no one wants to head a bank with branches in Baramulla, Anantnag and Kupwara!!!
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Quote vishal.sahay Replybullet Posted: 23/Sep/2007 at 4:47pm
But I came to know soon it is going to start is stock broking business and also going to start some branches in London, Dubai and Canada. Wont you think that will provide some value as cushion to having branches at baramulla. And also I was just glancing thourh its financial it does not seem to very expensive stock trading at 10 times current year earning and P/BV of 1.2 FY08 which is relatuvely quite cheap as compared to other PSU.

Edited by vishal.sahay - 23/Sep/2007 at 4:48pm
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Quote basant Replybullet Posted: 23/Sep/2007 at 4:53pm
the Kashmiri pundit community is one of the smartest and educated group of people in India. Many of them are NRI's and would like to bank with JK bank as it facilitates money transfer quite easily.
 
Why I mentioned Kupwara etc was that if CitiBank is interested in a bank takeover it would not like to get into those places.
 
Fundamental setup of this bank is excellent.
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Quote vishal.sahay Replybullet Posted: 23/Sep/2007 at 6:42pm

Got ur point sir.

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Quote vishal.sahay Replybullet Posted: 23/Sep/2007 at 6:54pm

Jammu & Kashmir Bank (JKB) is one of the fastest growing banks in India with a network of 517 branches spread across the country. It is unique in terms of its structure vis-à-vis other banks. It is banker to the Jammu and Kashmir (J&K) government and has a virtual monopoly in J&K. It is functionally distinct by virtue of being a government owned private sector bank.

(Rs bn) FY06 FY07E FY08E
Interest income 17.06 20.13 22.68
Interest Expense 10.43 12.21 12.72
Net Interest Income 6.64 7.92 9.96
Other income 1.33 1.44 1.55
Gross profit 4.52 5.56 7.32
Net profit 1.77 2.81 3.9
Gross NPA 2.5 2.2 2.3
Net NPA 0.9 0.6 0.7
Net interest 2.6 2.9 3.4
RoE (%) 10.2 14.6 17.6
RoAA (%) 0.7 1 1.3
Dividend Yield 1.3 1.3 1.3
EPS (Rs) 36.4 57.9 80.3
Adjusted BVPS 343.5 398.1 461.2
P/E (x) 13.4 11 7.9
P/ABV (x) 1.9 1.6 1.4
 
Source: Kotak Research Report
 
 
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Quote basant Replybullet Posted: 23/Sep/2007 at 7:17pm
Thanks for that. We will move this to the emerging companies section. Since I was in J&K for about 5 years in connection with our family business (which later went bust because of political/security concerns) I know the psyche up that goes with JK Bank there.
 
1) The average Joe on the street does not care/like about SBI/PNB etc. He thinks that JK Bank is God for him.
 
2) Kashmir with its fruit/horticulture and tourism industry is one of the most profitable banking areas. Havinga  branch in Srinagar is as good as having one in kolkata. YOu get truckloads of current accounts and fixed deposits.
 
3) The Govt. of India will only speed up spending in JK so all that money is banked through JK Bank.
 
4) Lending because of high quality business - fruit orchards, horticulture etc is profitable.
 
5) the average Govt. servant banks through JK bank because money is transferred on the same day. It is quite unlike other places where people bank with HDFC bank and ICICI. These names are foreign there.
 
JK bank in that state is a place where the average person feels safe and secure.


Edited by basant - 23/Sep/2007 at 7:22pm
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Quote vishal.sahay Replybullet Posted: 23/Sep/2007 at 7:55pm
Wow...sir you have pointed all the good points that a investor should look into company business model while investing..
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