PNB Q3 net up 5.5% at Rs 1,150 cr

Hit by higher provisioning towards bad loans and depreciation in investment, Punjab National Bank (PNB) today reported a modest 5.5% growth in net profit at Rs 1,150 crore for the third quarter ended December 31, 2011.

The bank had posted a net profit of Rs 1,089.77 crore for the October-December quarter of the previous fiscal.

The reason for the marginal increase in the net profit was increase in provision against non-performing assets and depreciation in investment, PNB Chairman and Managing Director K R Kamath told reporters here.

However, operating profit of the bank during the quarter rose by 13.9% at Rs 2,676 crore against Rs 2,350 crore in the same quarter in the previous fiscal, he said.

The total provision increased to Rs 1,526 crore in the quarter under reporting compared to Rs 1,260 crore in the same quarter a year ago.

Depreciation in investment during the quarter was to the tune of Rs 143 crore against Rs 44 crore in the same period previous fiscal.

The bank's gross NPAs increased to 2.42% at the end of third quarter from 2.03% in December, 2010. Its net NPAs also rose to 1.11% from 0.72% in the same quarter of 2010-11.

The total income of the lender rose to Rs 10,435.12 crore during the October-December period from Rs 7,976.35 crore in the same period last year.

The net interest margin (NIM) of the bank stood at 3.88% at the end of third quarter of the current fiscal against 4.13% in the third quarter of the previous fiscal.

Talking about the capital infusion of Rs 1,265 crore, Kamath said, with this the Tier-I capital of the bank would go up to 8% from current 7.85% at the end of December 31, 2011.

Besides, the fund infusion would help bank expand its overseas presence, he said, adding, operation in Norway, Australia and the UK subsidiary of the bank also requires capital.

He also said the capital infusion would help government raise its stake in the bank marginally. At present, Government of India holds 58% stake in the bank.

Yesterday, PNB board approved a fund infusion in the bank to the tune of Rs 1,285 crore through preferential issue of shares to the government.

During the first nine months of 2011-12, the net profit of the bank rose by 7% to Rs 3,460 crore from Rs 3,233 crore in the same period a year ago.