The country's fourth largest bank Punjab National Bank's (PNB) net profit in the first quarter of 2005-06 increased by just 2.61 per cent from a year earlier, as it booked a Rs 386 crore loss on in investment portfolio. | |
| The New Delhi-based bank's net profit in April-june 2006 was Rs 367.52 crore against Rs 358.16 crore a year earlier. |
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| S C Gupta, chairman and managing director of PNB, said: "The bank had to sustain a loss of Rs 386.76 crore in the first quarter due to transfer of securities from available for sale category to held to maturity category. The transfer was carried out to de-risk the Rs 43,000 crore investment portfolio from interest rate risk." |
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| PNB's total income in the first quarter of 2005-06 was Rs 2,922 crore, up 14.9 per cent from Rs 2,543 crore a year earlier. |
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| PNB plans to raise about Rs 3,000 crore of capital this year to support its credit expansion and meet the requirements of Basel-II norms, which the Reserve Bank of India proposes to implement from March 31, 2007. In the first quarter, PNB raised Rs 885 crore to meet its capital requirements. |
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| The bank is looking at recently approved hybrid instruments to bolster both its tier-I and tier-II capital base, Gupta said. "Once the current financial year's capital requirements are complete, PNB's capital to risk-weighted assets ratio would be around 12 per cent," Gupta said. |
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| It stood at 12.29 per cent at the end of the June 2006. PNB's advances at the end of June 2006 stood at Rs 77,546 crore, up by 37.4 per cent from Rs 56,435 crore a year earlier. |
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| The bank's net interest margin in the first quarter of the current year increased to 4.10 per cent from last year's 3.85 per cent because it was able to restrict cost increases, Gupta said. |
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