PNB net profit up 16% to Rs 425 crore

BANKING SCORECARD

Punjab National Bank (PNB) reported a 15.7 per cent increase in net profit to Rs 425 crore in the April-June quarter of 2007-08 compared with Rs 367 crore in the same quarter last year.

However, net non-performing assets (NPAs) has gone up to 0.98 per cent of net advances from 0.35 per cent in June 2006. "Of the total bad loans of Rs 4,000 crore, we are targeting to recover Rs 1,000 crore this fiscal," chairman K C Chakrabarty told reporters here.

PNB has witnessed increase in NPAs in all segments of lending portfolios, he added. "Consolidation and recovery of bad loans will be the focus of this year," he declared.

The bank's cost of deposits has gone up significantly from 4.38 per cent to 5.46 per cent as of June, 2007 owing to hardening of interest rates and high interest bearing deposit schemes, Chakrabarty said. So, the net interest margin of the bank has come down to 3.8 per cent from 4.1 per cent a year ago.

The total business (deposits and advances) of the bank grew 22 per cent to Rs 2,38,249 crore from Rs 1,94,719 crore a year ago. Deposits grew 21.7 per cent to Rs 1,42,609 crore, while advances rose 23 per cent to Rs 95,640 crore.

PNB plans to raise up to 1,500 crore in Tier II debt by the end of March 2008 to support asset growth, Chakrabarty said. "We are targeting credit growth of 20 percent this fiscal year," he added.