PNB’s net profit increased by 26% to Rs 541.46cr

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PNB’s net profit increased by 26% to Rs 541.46cr

This article was posted on Feb 24, 2008 and is filed under Press Releases

Dr. K.C. Chakrabarty, Chairman & Managing Director of Punjab National Bank disclosed the bank’s reviewed financial results for the third quarter of FY 2007-08.

Profit

Net profit

Ÿ The Net profit (Q3) of the Bank increased by 26% to Rs 541.46 Cr from Rs 429.87 Cr of last year, due to better management of NPA portfolio and improved product mix. Further the Bank was able to earn higher non-interest income.

Net Profit of the bank for the nine months ended December 2007 amounted to Rs 1505.01 Cr, as compared to Rs 1302.37 Cr during the nine months ended December 2006, registering a y-o-y growth of 15.6%.

Operating Profit

Ÿ Operating Profit : for Q3 increased to Rs 991.35 Cr from Rs 956.65 Cr in the corresponding quarter of last year (y-o-y growth of 3.6%).

Operating profit of the bank during the nine months ended December 2007 amounted to Rs 2281.72 Cr (Rs 2348.28 Cr during comparative period last year). The decline is mainly due to the loss of Rs 497.74 Cr, which the bank incurred on transfer of securities to HTM portfolio. The transfer of securities was done during the first quarter of FY 2007-08 to de-risk the investment portfolio of the bank from interest rate risk.

Income

Ÿ Total Income rose by 26% to Rs 4120 Cr (Q3), mainly due to increase of 37% in interest income on advances (Rs 2669 Cr).

Ÿ The yield on advances improved from 9.42% in Dec 2006 (Q3) to 10.56% in Dec 2007(Q3).

Non-Interest Expenses

Ÿ The increase in Operating expenses (Rs 916 Cr-Q3) of the Bank was contained at 12.8% despite additional expenditure on post retirement benefits on account of implementation of AS-15.

Net Interest Margin

Ÿ While there has been pressure on Net Interest Income, the bank has been able to maintain its Net Interest Margin at 3.66% during Q3 of FY 08 as compared to 3.49 in the Q2 of FY 08 and 3.85% for the year 2006-07.

Ÿ Return on Assets (ROA) at 1.21% for quarter ending December 2007, as compared to 1.14% at the end of December 2006.

Ÿ Capital to Risk Asset Ratio (CRAR) at the end of December 2007 stood at 14.04%, as compared to 12.90% at the end of December 2006.

Ÿ Return on Tangible Networth : 17.46% (17.23%).

Ÿ Total Business : Rs 2,54,156 Cr (y-o-y growth of 16.6%).

w Deposits : Rs 1,52,622 Cr at the end of December 2007 (growth of 17.2% on y-o-y basis).

Ÿ Advances : Rs 1,01,534 Cr at the end of December 2007 (y-o-y growth of 15.8%).

ü Retail credit (excluding traders) increased by 28% to Rs 17264 Cr.

ü Education loan which is the main thrust area of the bank has registered an increase of 32.6 % to Rs 1,217 Cr.

Ÿ Priority sector advances : Rs 41706 Cr. Ratio of PS advances to adjusted net bank credit : 42.38 %.

ü Credit to Agriculture : Rs 19032 Cr. Agricultural advances as percent to adjusted net bank credit : 18.3%.

ü The number of No Frill accounts under PNB Mitra Scheme are more than 5 lakh.

ü Issuance of Kisan Credit Cards (KCCs) : Total KCC issued so far is Around 23 lakh of which 1.74 Lac were issued during the current year.

ü Small Enterprises at Dec end 2007 : Rs 11877 Cr (Y-O-Y growth of 17.2%).

ü PNB’s 8 Farmers’ Training Centres (FTCs) trained around 1.21 lakh persons, including 16,654 women.

Ÿ Export-Import turnover : Rs 43188 Cr (y-o-y growth of 10.48%).

Information Technology

Ÿ Largest network of Core Banking Solution SOLs : 3153 Service Outlets (SOLs) at 1217 centres, covering 88% of bank’s total business, facilitating around 2.51Cr customers with “anytime and anywhere” banking.

Ÿ The bank has 2671 RTGS and 1395 SFMS branches.

Ÿ ATMs (PNBs) : 1293.

Ÿ ATMs (sharing arrangement): More than 25600.

Ÿ Internet Banking Services : used by 3 lakh users.

NPA Management

Ÿ Focussed attention on NPA Administration has shown good results in bringing down both Gross and the Net NPA levels.

Sept’07 Dec’07 Variation

Gross NPA 4717 4251 – 466

% age to Gross Adv. 4.57 4.11 – 46 bps

Net NPA 1866 1339 – 527

% age to Net Adv. 1.86 1.33 – 53 bps

Ÿ This has been identified as a thrust area. The focus is on arresting slippages, recovery and upgradation of NPA accounts. We expect even better results in time to come.

New Initiatives

Ÿ The Bank has an ambitious target to launch 10 pilot projects on financial inclusion out of which 3 projects have already been Launched at Neemrana (Rajasthan); Tineri (Bihar) and Matki Jharoli (Uttar Pradesh).

ü These projects have a holistic approach of providing basic financial services to the financially excluded poor. We have so far issued 8000 smart cards & opened 10000 accounts. The bio metric enabled technology is being used for promotion of this project. PNB endeavors to launch seven more such projects in the Indo Gangetic belt, very soon.

Ÿ Under Financial Inclusion, the bank plans to cover 30,000 villages and 75 million people by 2010.

Ÿ We have received one license for opening of a dedicated Micro finance branch at Mukundpur in Delhi which is likely to be operationalised by March 2008. This branch shall be exclusively for financial inclusion of the urban poor.

Ÿ Total 99 licences have been received for opening new Branches.

Ÿ The bank is looking at introducing new products such as health insurance, micro insurance and pension for the rural population.

Ÿ The Bank has opened a branch at HongKong, increasing our overseas presence.

Ÿ The bank has received the RBI approval for upgrading its Shanghai representative office to a full fledged branch in China and for having joint venture arrangement in Malaysia. The bank is in the process of entering into the same.

The bank is also exploring possibilities for its presence in Bhutan and setting up of a branch in Dubai International Financial Centre (DIFC), UAE. The bank application is in advances stage with the Office of Superintendent of the Financial Institutions, Canada for opening a wholly owned subsidiary there.. The bank’s application is under process with Monetary Authority of Singapore for setting up a Off-shore banking branch.

Sourced From: Punjab National Bank

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