As the general mood in the market is bearish and banking stocks have been receiving drubbing on the bourses for quite some time now, many investors badly needed an exit opportunity from these counters. A good first-half result could have given a fresh lease of life into these counters. However, while Jammu and Kashmir Bank stock fell despite good results, City Union Bank has come out with a poor performance for the first-half.

Jammu and Kashmir Bank has posted a 76 per cent jump in net profit from Rs 25.35 crore in the six-month period ended September 1997 to Rs 44.54 crore in the first-half of the current fiscal. However, despite the news of a good first-half performance, the counter onBSE is hardly attracting any buying interest. The scrip is currently hovering around Rs 24, which is at a steep discount to the offer price of Rs 38.

A 76 per cent rise in net profit was despite the fact that the bank increased its provisions and contingencies from Rs 33.03 crore in the first-half of 1997 to Rs 49.69 crore in the corresponding period of the current fiscal. Deposits registered a 38 per cent growth from Rs 3843 crore to Rs 5285 crore and advances increased from Rs 1606 crore to Rs 2193 crore.

City Union Bank has posted a marginal growth in net profit from Rs 6.1 crore to Rs 6.35 crore, up only 4 per cent. The growth in net profit came from a 25 per cent rise in total income from Rs 67.26 crore in the first-half of the fiscal 1997 to Rs 84.2 crore in the first six months of the current fiscal.

The poor performance of the bank has further disappointed the market with the scrip continuing its downward journey. After touching a high of Rs 25 on September 16, the scrip has been steadilyfalling to the current level of Rs 18.95. The current price of Rs 18 is way below the bank's offer price of Rs 32 for public. City Union Bank's first-half performance would have been even worse if the bank had made a higher provision for NPAs. The bank has reduced its provision for NPAs by 6.9 per cent to Rs 4.17 crore from Rs 4.46 crore in the first-half of the current fiscal.