1QFY2012 Result Update | Banking

August 9, 2011

Jammu and Kashmir Bank

Performance Highlights

NEUTRAL
CMP Target Price `841 1QFY11 366 288 145 % chg (yoy) 19.5 9.7 25.4

Particulars (` cr) NII Pre-Prov. Profit PAT

1QFY12 437 316 182

4QFY11 416 296 139

% chg (qoq) 5.2 6.9 31.6

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 4,075 0.6 938/695 10,877 10 16,858 5,073 JKBK.BO J&KBK@IN

Source: Company, Angel Research

For 1QFY2012, J&K Bank registered healthy net profit growth of 25.4% yoy (up by strong 31.6% qoq) to `182cr, above our estimates due to lower provisioning expenses than built in by us. Stable asset quality and marginal improvement in reported NIM were the key highlights of the results. We recommend Neutral on the stock. Asset quality remains stable; Margin shows improvement of 10bp: The banks loan book grew marginally by 0.8% qoq to `26,403cr; however, deposits declined by 3.6% qoq to `43,078cr. Saving deposits increased by strong 3.7% qoq; however, current deposits declined by 21.7% sequentially, leading to a marginal 9bp qoq decline in CASA ratio to 40.4%. Cost of deposits for the bank only increased by 2bp qoq to 5.4%, while yield on advances increased by 27bp qoq to 11.4%, leading to a sequential rise of 10bp in reported NIM to 3.8%. During the quarter, fee income declined by 19.1% qoq to `42cr, while treasury income declined by 55.4% qoq to `10cr. For 1QFY2012, the bank managed to maintain its asset quality with gross NPAs rising marginally by 1.8% qoq to `528cr. Net NPAs, however, rose by 9.6% qoq to `58cr in 1QFY2011. NPA coverage ratio continued to be strong at 92.5% for 1QFY2012 (92.7% in 4QFY2011). According to management, the bank has already switched over all accounts to system-based NPA recognition. Outlook and valuation: The stock is trading at 0.9x FY2013E ABV vis--vis its historic range of 0.81.4x and five-year median of 1.02x. Also, immediate levers in the form of increased CD ratio from the current low 61.3% into higher yielding advances are likely to provide near-term higher momentum to NII growth for the bank relative to other mid-size banks. Further, with 40.4% CASA ratio, the bank is more favourably placed than its peers to handle NIM pressures from high deposit rates. However, the stock has already outperformed other mid-size PSU banks significantly in the last six months and in relative terms we believe the premium at which it is trading to other mid-size PSU banks adequately reflects the positive outlook for the bank. Hence, we recommend a Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 53.2 3.7 24.1 19.1

Abs. (%) Sensex J&K Bank

3m (9.0) 8.4

1yr (7.8) 5.1

3yr 11.1 63.7

Key financials
Y/E March (` cr) NII % chg Net Profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2010 1,119 11.9 512 25.0 2.9 105.7 8.0 1.4 1.3 18.2

FY2011 1,544 37.9 615 20.1 3.4 126.9 6.6 1.2 1.3 19.0

FY2012E 1,710 10.8 697 13.4 3.3 143.8 5.8 1.0 1.3 18.6

FY2013E 1,804 5.5 709 1.6 3.1 146.2 5.8 0.9 1.2 16.5

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

Jammu and Kashmir Bank | 1QFY2012 Result Update

Exhibit 1: 1QFY2012 performance

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

1QFY12 4QFY11 % chg (qoq) 1QFY11 % chg (yoy) 1,056 751 299 6 619 437 67 57 42 10 15 504 188 128 60 316 44 25 4 16 272 90 182 33.0 1,014 718 290 5 598 416 119 96 51 23 45 535 239 167 72 296 76 32 20 24 220 82 139 37.1 4.1 4.5 3.2 11.8 3.4 5.2 (43.7) (40.9) (19.1) (55.4) (65.9) (5.7) (21.4) (23.6) (16.0) 6.9 (41.2) (21.9) (81.5) (33.5) 23.4 9.6 31.6 (416)bp 866 626 236 3 500 366 94 60 42 34 18 459 171 120 51 288 70 44 26 0 218 73 145 33.4 22.0 19.9 26.6 79.9 23.8 19.5 (28.5) (5.3) (0.6) (69.9) (16.1) 9.7 9.7 6.7 16.7 9.7 (36.5) (43.2) (85.8) 24.6 23.0 25.4 (44)bp

Exhibit 2: 1QFY2012 Actual vs. Angel estimates

Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 437 67 504 188 316 44 272 90 182

Estimates 424 80 505 188 317 77 240 78 162

Var. (%) 3.0 (16.3) (0.1) 0.0 (0.1) (42.4) 13.5 15.3 12.6

August 9, 2011

Jammu and Kashmir Bank | 1QFY2012 Result Update

Exhibit 3: 1QFY2012 performance

Particulars (` cr) Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

1QFY12 26,403 43,078 61.3 4,198 13,204 17,401 40.4 14.4 11.8 5.4 11.4 6.3 3.8 37.3 528 2.0 58 0.2 92.5 0.2

4QFY11 26,194 44,676 58.6 5,360 12,727 18,087 40.5 13.7 11.3 5.4 11.2 6.3 3.7 44.7 519 2.0 53 0.2 92.7 2.0 0.3

% chg (qoq) 0.8 (3.6) 266bp (21.7) 3.7 (3.8) (9)bp 65bp 50bp 2bp 27bp 3bp 10bp (741)bp 1.8 2bp 9.6 2bp (25)bp (203)bp (6)bp

1QFY11 % chg (yoy) 23,035 37,629 61.2 3,801 10,437 14,239 37.8 16.1 13.1 5.1 10.9 6.1 3.7 37.3 451 1.9 8 0.0 98.7 0.5 0.4 14.6 14.5 8bp 10.4 26.5 22.2 256bp (177)bp (128)bp 28bp 56bp 18bp 12bp (0)bp 17.2 5bp 624.8 19bp (626)bp (50)bp (21)bp

Sequential contraction in business; CASA ratio stable at above 40%

The banks loan book grew marginally by 0.8% qoq to `26,403cr; however, deposits declined by 3.6% qoq to `43,078cr. Saving deposits increased by strong 3.7% qoq; however, current deposits declined by 21.7% sequentially, leading to a marginal 9bp qoq decline in CASA ratio to 40.4%. The banks outstanding loan books concentration within the J&K state is ~40%, while that outside the state is ~60%. As margins are higher within the state due to lower cost of deposits on account of higher proportion of CASA deposits, management would like ~45% of loan portfolio concentrated within the J&K state by the end of FY2012.

August 9, 2011

Jammu and Kashmir Bank | 1QFY2012 Result Update

Exhibit 4: Deposits growth negative for 1QFY2012

Adv. qoq chg (%) 15.0 61.2 10.0 5.0 58.4 Dep. qoq chg (%) 62.0 58.6 CDR (%, RHS) 61.3 64.0 62.0 60.0 58.0

Exhibit 5: CASA ratio stable at above 40% levels

CASA ratio (%) 42.0 41.0 40.0 39.0 38.0 25.3 19.4 16.8 22.2 35.6 CASA growth (% yoy, RHS)) 40.0 30.0 20.0 10.0 0.0

1.1

0.6 5.5

9.4 3.0

3.3 9.3

0.8

56.0 54.0

37.8

41.1

39.6

40.5

(0.1)

(3.6)

52.0 50.0

37.0 36.0

(5.0)

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

Out of the total deposits, ~65% is contributed by the state of J&K. Of this 65%, ~55% of the deposits comprise CASA deposits. The pace of CASA deposits accretion in the state is expected to remain healthy, with the bank planning to further strengthen its presence by opening 6070 branches in the state in FY2012.

Marginal improvement in NIM for 1QFY2012

Cost of deposits for the bank only increased by 2bp qoq to 5.4%, while yield on advances increased by 27bp qoq to 11.4%, leading to a sequential rise of 10bp in reported NIM to 3.8%.

Exhibit 6: Higher yield on advances for 1QFY12...

(%) 11.60 11.20 10.86 10.80 10.40 10.00 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 11.00 10.71 11.15 11.42

Exhibit 7: ...leads to marginal improvement in NIM

(%) 4.00 3.80 3.60 3.40 3.20 3.00 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 3.70 3.66 3.70 3.72 3.82

Source: Company, Angel Research

Source: Company, Angel Research

Weak performance sequentially on other income front

During the quarter, fee income declined by 19.1% qoq to `42cr, while treasury income declined by 55.4% qoq to `10cr. Consequently, total other income declined by 43.7% qoq (down 28.5% yoy) to `67cr. We expect fee income to grow by 11.9% and 16.2% in FY2012 and FY2013, respectively.

August 9, 2011

40.4

Jammu and Kashmir Bank | 1QFY2012 Result Update

Asset quality remains stable

For 1QFY2012, the bank managed to maintain its asset quality with gross NPAs rising marginally by 1.8% qoq to `528cr. Net NPAs, however, rose by 9.6% qoq to `58cr in 1QFY2011. NPA coverage ratio continued to be strong at 92.5% for 1QFY2012 (92.7% in 4QFY2011). The banks cumulative restructured book as of 1QFY2012 stands at `2,166cr (~`600cr added during FY2011), from which ~`129cr has slipped into NPAs. The outstanding restructured book as of 1QFY2011 stands at `2,035cr According to management, the bank has already switched over all accounts to system-based NPA recognition. The banks exposure to the power sector is ~13% of its loan book, with no exposure to any SEBs. We estimate slippage ratio to be 1.3% and 1.6% for FY2012 and FY2013, respectively.

Exhibit 8: Best-in-class asset quality

2.5 2.0 1.5 1.0 Gross NPAs (%) 98.7 95.5 Net NPAs (%) 98.4 92.7 92.5 90.0 PCR (%, RHS) 100.0

Exhibit 9: Trend in NPA provision-to-avg. assets

(%) 0.5 0.4 0.3 0.2 0.1 70.0 0.0 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 0.1 0.4 0.4 0.3 0.2

80.0

1.9 0.0

2.2 0.1

2.0 0.0

2.0 0.2

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Source: Company, Angel Research

2.0 0.2

0.5

Source: Company, Angel Research

Employee costs decline qoq

Operating expenses decreased by 21.4% qoq to `188cr on the back of a 23.6% qoq decline in employee costs to `128cr due to a high base in 4QFY2011 owing to pension costs related to retired employees. Consequently, the cost-to-income ratio improved to 37.3% in 1QFY2012 from 44.7% in 4QFY2011.

Investment arguments
Well-protected loan book
Structurally, the bank's credit mix has only a small portion directly exposed to credit risks from political disturbances in J&K state. For instance, 59.0% of the bank's loan book as of FY2011 is outside the state of J&K, of which 57.5% is towards corporates. The state government repaid `2,300cr during 4QFY2011, which is likely to be deployed in high-rated corporates outside J&K. Only ~17% of the total loans are in the relatively sensitive Kashmir valley region, large portion of which is towards the healthy horticulture and trade sectors, which see minimal disruption even during strikes due to essential linkages with rest of the country.

August 9, 2011

Jammu and Kashmir Bank | 1QFY2012 Result Update

Robust asset quality

Over the years, the bank has maintained robust asset quality, with the best-in-industry provision coverage ratio (92.5% as of 1QFY2012). Slippages were comfortable at 1.3% for 1QFY2012 compared to 2.0% for 4QFY2011, and are lower compared to most other PSU banks. We expect asset quality to sustain at these levels and see slippages at 1.3% and 1.6% for FY2012 and FY2013, respectively.

Strong branch network and legacy Dominant market share

The bank has ~400 branches in J&K. Due to its strong branch network and legacy of banking relationships, the bank has a dominant 70% market share in deposits in J&K. CASA deposits constituted strong 47.8% of incremental deposits growth from FY200411. This strong base of low-cost deposits is expected to sustain relatively higher NIM of 3.13.3% among mid-size banks.

Outlook and valuation

The stock is trading at 0.9x FY2013E ABV vis--vis its historic range of 0.81.4x and five-year median of 1.02x. We have a positive view on the banks business considering its strong deposit mix, dominant regional market share and healthy track record in asset quality. We believe this provides sufficient margin of safety from the risks of political disturbances in J&K, especially in light of the bank's steady performance even during past crises. Even taking into account the inherently lower-than-national average growth (in GDP, deposits and credit) in J&K, at just 0.9x FY2013E P/ABV and with sustainable RoEs of at least 16%, the stock seems adequately priced. Also, immediate levers in the form of increased CD ratio from the current low 61.3% into higher yielding advances are likely to provide near-term higher momentum to NII growth for the bank relative to other mid-size banks. Further, with 40.4% CASA ratio, the bank is more favourably placed than its peers to handle NIM pressures from high deposit rates. However, the stock has already outperformed other mid-size PSU banks significantly in the last six months and in relative terms we believe the premium at which it is trading to other mid-size PSU banks adequately reflects the positive outlook for the bank. Hence, we recommend a Neutral rating on the stock.

August 9, 2011

Jammu and Kashmir Bank | 1QFY2012 Result Update

Exhibit 10: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio Treasury gain/(loss) (% of investment)
Source: Angel Research

Earlier estimates FY2012

19.0 13.0 39.7 3.2 (0.3) 17.0 1.3 92.5 0.3

Revised estimates FY2012

17.0 10.0 40.8 3.3 (11.1) 2.5 17.0 1.3 91.0 0.3

FY2013
19.0 13.0 38.9 3.0 13.6 15.0 15.0 1.5 85.0 0.3

FY2013
19.0 11.0 40.7 3.1 16.6 13.0 13.0 1.6 85.0 0.3

Exhibit 11: Change in estimates

Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

Earlier estimates
1,676 364 2,040 799 1,241 227 1,014 329 685

FY2012 Revised estimates

1,710 324 2,034 812 1,222 190 1,032 335 697

Earlier Var. (%) estimates

2.0 (10.8) (0.3) 1.6 (1.5) (16.4) 1.8 1.8 1.8 1,756 413 2,169 919 1,250 173 1,078 350 728

FY2013 Revised estimates

1,804 378 2,182 918 1,265 216 1,049 340 709

Var. (%)
2.7 (8.5) 0.6 (0.1) 1.1 24.9 (2.7) (2.7) (2.7)

Exhibit 12: P/ABV band

Price (`) 1,600 1,400 1,200 1,000 800 600 400 200 0 0.5x 0.75x 1x 1.25x 1.5x

Oct-02

Oct-09

Feb-05

Sep-05

May-03

Nov-06

May-10

Dec-03

Dec-10

Mar-02

Aug-08

Source: Company, Bloomberg, Angel Research

August 9, 2011

Mar-09

Feb-12

Jun-07

Jan-08

Jul-04

Apr-06

Jul-11

Jammu and Kashmir Bank | 1QFY2012 Result Update

Exhibit 13: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk
#

Reco. Buy Accumulate Accumulate Buy Buy Buy Neutral Neutral Buy Accumulate Buy Accumulate Neutral Buy Neutral Neutral Accumulate Accumulate Neutral Accumulate Accumulate Buy Buy Neutral Accumulate Buy Neutral

CMP (`) 1,211 384 466 941 21 292 191 132 854 350 52 434 109 460 83 118 213 128 841 333 1,116 2,231 111 77 279 87 60

Tgt. price (`) 1,648 441 519 1,281 24 353 1,018 397 61 490 576 232 143 372 1,217 2,776 131 313 103 -

Upside (%) 36.1 14.9 11.4 36.1 16.1 20.7 19.2 13.4 18.3 13.1 25.3 9.0 11.3 11.5 9.1 24.5 18.5 12.3 18.3 -

FY2013E P/ABV (x) 1.9 1.0 3.1 1.7 1.1 1.9 0.9 0.9 1.2 1.0 0.7 0.8 0.8 0.7 0.6 0.7 0.9 0.8 0.9 0.8 1.3 1.7 0.8 1.0 1.0 0.7 0.8

FY2013E Tgt P/ABV (x) 2.7 1.2 3.5 2.3 1.3 2.3 1.4 1.1 0.8 1.0 0.9 1.0 0.9 0.9 1.4 2.1 0.9 1.2 0.9 -

FY2013E P/E (x) 10.0 7.9 16.2 13.3 6.5 9.8 5.4 5.9 6.4 5.5 4.9 5.0 5.3 4.3 3.9 5.5 5.4 4.9 5.8 5.6 6.9 8.2 5.1 4.6 5.9 5.1 6.4

FY2011E-13E EPS CAGR (%) 20.9 19.0 30.5 25.8 11.6 19.1 9.2 (0.6) 10.8 18.7 30.8 (2.4) (14.0) 6.1 7.0 13.0 1.2 22.4 7.3 7.5 7.4 44.2 8.6 16.0 20.0 13.2 61.9

FY2013E RoA (%) 1.5 1.2 1.7 1.5 0.9 1.2 0.9 0.9 1.1 0.8 0.6 0.9 0.5 0.9 0.8 0.7 1.2 0.7 1.2 0.9 1.0 1.1 0.6 0.6 0.8 0.6 0.4

FY2013E RoE (%) 21.0 13.9 20.9 16.0 17.2 20.6 17.8 15.9 19.6 18.0 14.8 17.2 14.4 17.9 16.5 14.3 17.8 16.4 16.5 14.4 20.0 22.6 15.6 17.0 17.9 14.1 11.7

IndBk

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

August 9, 2011

Jammu and Kashmir Bank | 1QFY2012 Result Update

Income statement
Y/E March (` cr) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY07 768 15.7 183 64.8 951 22.7 372 7.9 578 34.7 163 (3.1) 415 59.0 141 33.9 274 55.2 FY08 810 5.5 263 44.1 1,074 13.0 404 8.4 670 15.9 94 (42.2) 576 38.7 216 37.5 360 31.2 FY09 1,000 23.4 261 (0.7) 1,262 17.5 471 16.7 791 18.0 159 69.3 631 9.6 222 35.1 410 13.8 FY10 1,119 11.9 416 59.2 1,536 21.7 577 22.6 958 21.2 167 4.6 792 25.3 279 35.3 512 25.0 FY11E 1,544 37.9 365 (12.4) 1,908 24.3 759 31.4 1,149 20.0 215 29.1 934 18.0 319 34.2 615 20.1 FY12E 1,710 10.8 324 (11.1) 2,034 6.6 812 7.0 1,222 6.3 190 (11.8) 1,032 10.5 335 32.4 697 13.4 FY13E 1,804 5.5 378 16.6 2,182 7.3 918 13.0 1,265 3.5 216 13.6 1,049 1.6 340 32.4 709 1.6

Balance sheet
Y/E March (` cr) Share Capital Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY07 48 1,960 25,194 7.3 620 823 28,647 1,855 1,759 7,392 17,080 17.9 183 377 28,647 8.3 FY08 48 2,260 13.5 752 1,102 3,220 1,217 FY09 48 2,574 15.4 997 1,070 2,303 2,972 FY10 48 2,962 37,237 12.8 500 600 1,199 42,547 2,745 1,870 13,956 23,057 10.2 204 715 42,547 12.9 FY11E 48 3,430 44,676 20.0 505 600 1,249 50,508 2,975 574 19,696 26,194 13.6 394 676 50,508 18.7 FY12E 48 3,964 10.0 555 660 1,188 3,194 1,111 FY13E 48 4,507 11.0 616 733 1,217 3,546 1,233

28,593 33,004

49,144 54,549

32,756 37,693

55,559 61,670

8,758 10,736 18,883 20,930 10.6 192 486 14.3 10.8 199 552 15.1

19,443 19,144 30,647 36,469 17.0 420 744 10.0 19.0 452 826 11.0

32,756 37,693

55,559 61,670

August 9, 2011

Jammu and Kashmir Bank | 1QFY2012 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset quality (%) Gross NPAs Net NPAs Slippages NPA Prov./Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis (%) NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage (x) RoE 2.8 0.6 2.2 0.1 2.3 0.5 2.9 1.4 1.5 0.5 1.0 15.2 15.2 2.7 0.3 2.3 0.3 2.6 0.6 3.2 1.3 1.9 0.7 1.2 15.4 18.2 2.9 0.5 2.4 0.2 2.6 0.5 3.2 1.3 1.8 0.6 1.2 14.9 17.4 2.8 0.4 2.4 0.4 2.8 0.6 3.4 1.4 2.0 0.7 1.3 14.2 18.2 3.3 0.5 2.9 0.2 3.1 0.6 3.6 1.6 2.0 0.7 1.3 14.3 19.0 3.2 0.4 2.9 0.0 2.9 0.6 3.5 1.5 1.9 0.6 1.3 14.2 18.6 3.1 0.4 2.7 0.0 2.8 0.6 3.4 1.6 1.8 0.6 1.2 13.7 16.5 14.8 2.1 1.4 11.3 1.8 1.8 9.9 1.6 2.0 8.0 1.4 2.6 6.6 1.2 3.1 5.8 1.0 3.4 5.8 0.9 3.5 56.6 11.5 74.2 15.5 84.5 510.4 16.9 105.7 620.8 22.0 126.9 717.4 26.0 143.8 827.5 29.0 146.2 939.4 29.5 400.2 459.2 2.9 1.1 1.9 0.3 61.4 2.5 1.1 1.3 0.1 58.0 2.6 1.4 2.1 0.2 48.6 2.0 0.3 0.9 0.4 86.1 1.9 0.2 1.2 0.3 89.7 2.3 0.3 1.3 0.3 91.0 2.7 0.5 1.6 0.3 85.0 37.0 67.8 13.2 12.6 39.2 66.0 12.8 12.1 38.1 63.4 14.5 13.8 40.7 61.9 15.9 12.8 40.5 58.6 13.7 11.3 40.8 62.4 14.3 11.9 40.7 66.9 14.6 12.2 2.9 39.2 1.0 15.2 2.7 37.6 1.2 18.2 2.9 37.3 1.2 17.4 2.9 37.6 1.3 18.2 3.4 39.8 1.3 19.0 3.3 39.9 1.3 18.6 3.1 42.0 1.2 16.5 FY07 FY08 FY09 FY10 FY11E FY12E FY13E

August 9, 2011

10

Jammu and Kashmir Bank | 1QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Jammu & Kashmir Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

August 9, 2011

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