PNB Q3 profit plunges 42% to Rs 755 cr on higher provisioning

Punjab National Bank today posted 42.1 per cent dip in net profit to Rs 755 crore for its third quarter ended December due to higher provisioning for bad loans.
The country's second largest public sector bank by assets had reported net profit of Rs 1,306 crore for the October- December quarter of 2012-13 financial year.
Total provisions, including for income tax, made during Q3, 2013-14 were Rs 1,947 crore as against Rs 1,376 crore in the year-ago period, an increase of 41.4 per cent, PNB Chairman and Managing Director K R Kamath said.
Provisions just on account of bad loans have more than doubled to Rs 1,083 crore in the quarter against Rs 466 crore in the same period of previous fiscal.

"We are moving from consolidation strategy to growth strategy and we are seeing the results," Kamath said.
As far as asset quality of the bank is concerned, gross NPAs as a percentage to total advances rose to 4.96 per cent from 4.61 per cent in the same quarter an year ago.

Its net NPAs went up to 2.80 per cent from 2.56 per cent at the end of December 2012.
Total income has increased to Rs 11,922 crore for the quarter ended December, 2013 from Rs 11,499 crore in the same quarter last fiscal.
Meanwhile, the bank has declared interim dividend of Rs 10 per share or 100 per cent on the paid up capital for 2013-14.

Kamath said the government has infused Rs 500 crore in the current fiscal, following which its holding in the bank has gone up to 58.87 per cent.
When asked about the plan for raising rates in view of recent monetary policy action by RBI, Kamath said, if demand for credit picks up, there is possibility of deposit rates going up and subsequently lending rate.
"If demand for credit improves and if deposit growth is not increasing then we may have to increase interest rates on deposits and then possibly think that which of the sector we may have to pass on this increase to customers," he said.

Earlier this week, the RBI increased the short-term lending (repo) rate to 8 per cent from 7.75 per cent in its bid to anchor inflationary expectation.
Operating profit of PNB remained flat at Rs 2,702 crore as against Rs 2,682 crore in the same period of the previous fiscal.
However, the net interest income improved by 13.1 per cent to Rs 4,221 crore as compared to Rs 3,732 crore in the same quarter a year ago.
Net interest margin stood at 3.57 per cent, he said, adding that the bank aims NIM of 3.5 per cent for the entire fiscal.