PNB Q2 net down 11.6% to Rs 1,065 cr

The total income in Q2 rose Rs 11,326 crore from Rs 9,840 crore in Q2 of 2011-12

Punjab National Bank (PNB) today posted 11.57 decline in its net profit at Rs 1,066 crore for the second quarter ended September 2012, compared with Rs 1,205 crore in the same period last year. The drop came on account of increase in provisioning towards non-performing assets (NPAs).

“Increase in provisioning towards NPAs by 257 per cent during the quarter resulted in decline in net profit for the quarter,” PNB Chairman KR Kamath told a press conference. He said NPAs was an area of concern and the bank had consciously decided not to write off the debt.

During July-September 2012 provisioning towards NPAs stood at Rs 1,140 crore, against Rs 319 crore in the same period of previous fiscal. Net NPAs of the Delhi-based bank increased from Rs 2,088 crore at the end of September 2011 to Rs 7,933 crore at the end of September 2012. As percentage of total assets net NPAs were 2.69 per cent this year, against Rs 0.84 per cent last year.

‘It is a reflection of what is happening in the economy. It is difficult to say whether the worst is over. It all depends on how economy behaves in next 3-6 months,” Kamath said.  

On the bank's capital raising plans, he said, "At the end of the year we see our capital adequacy ratio should be 12 per cent plus. We do not have any capital raising plans for current fiscal".

Total income rose by 15.1 per cent to Rs 11,326 crore on the back of 16.4 per cent growth in interest income. Net interest income improved by 11.8 per cent from Rs 6,568 crore to Rs 7,345 crore. Net interest margin stood at 3.5 per cent at the end of September. Restructured loan account stood at Rs 27,850 crore in the September quarter, of which 11 per cent are NPA.

Operating profit for July-September quarter was at Rs 2,533 crore, which is marginally higher than Rs 2,528 crore in the year ago period. Total business of the bank rose to Rs 6,95,534 crore, against Rs 5,90,803 crore in Sep 2011, showing a growth of 17.7 per cent.

Deposits at the end of September 2012 amounted to Rs 4,00,747 crore, compared with Rs 3,41,783 crore in September 2011, exhibiting a growth of 17.3 per cent. Net Advances of the bank at Rs 2,94,787 crore grew by 18.4 per cent from Rs 2,49,020 crore.