PNB net jumps 31%; final dividend at 120%

State-run Punjab National Bank (PNB) on Thursday reported a 31.1 per cent jump in net profit for the quarter ended March 2010. Net profit stood at Rs 1,135 crore during the quarter, compared with Rs 866 crore in the corresponding period of the previous financial year.

“There has been an effective cost management and yield management too. My non-interest income also went up,” said KR Kamath, chairman and managing director of PNB.

The second-largest public sector lender said its total income for the January-March quarter rose 6.8 per cent to Rs 6,461 crore, against Rs 6,048 crore in the year-ago quarter. Operating profit stood at Rs 2,251 crore, against Rs 1,538 crore in the corresponding period of 2008-09, registering a growth of 46.4 per cent. Net interest margin improved to 3.99 per cent from 3.2 per cent in the year-ago quarter.

For the year ended March 31, 2010, the bank posted a 26.4 per cent increase in net profit to Rs 3,905 crore. Its total income for the year increased by 12.11 per cent to Rs 24,879 crore, whereas operating profit rose 26.1 per cent to Rs 7,173 crore. Net interest income during the year grew by 24.8 per cent, while its net interest margin improved to 3.57 per cent.

“We will try to hold the net interest margin around the same level in the current year as well,” Kamath said. He projected 22-24 per cent growth in credit (against 20.6 per cent last year) and 20-22 per cent rise in deposits (against 18.9 per cent last year) in 2010-11.

The bank had a capital adequacy ratio of 14.16 per cent at the end of March 2010. Net non-performing assets ratio stood at 0.53 per cent due to farm debt relief, against 0.17 per cent in the previous year.

The board of directors has proposed a final dividend of 120 per cent, in addition to 100 per cent interim dividend already paid.