Business Daily from THE HINDU group of publications
Tuesday, Oct 31, 2006
Corporate Results - Public Sector Banks
Money & Banking - Financial Performance
Mr S. C. Gupta
New Delhi , Oct. 30
Punjab National Bank's profit after tax (PAT) has risen 19.7 per cent to Rs 505 crore for the three months ended September 30, as against Rs 422 crore for the corresponding quarter of 2005-06. Operating profit has also shot up by 30 per cent, from Rs 684 crore to Rs 889 crore.
For the half year ended September 30, 2006, the bank's PAT went up by only 11.8 per cent (from Rs 780 crore to Rs 873 crore), with operating profit, too, going up moderately by 3.9 per cent (from Rs 1,328 crore to Rs 1,379 crore).
"Our second quarter results have been much better. In the first quarter, we made a loss amounting to Rs 387 crore on transfer of securities from AFS (Available for Sale) to HTM (Held to Maturity) category. We did this in order to de-risk our investment portfolio from increase in yields on government securities. If we had not done so, the operating profit for the entire first half, at Rs 1,766 crore, would have grown by 33 per cent", Mr. S.C. Gupta, CMD of PNB, told presspersons.
He attributed the overall increase in profitability figures to the bank increasing its prime lending rate by 75 basis points since May (to 11.50 per cent).
Alongside, it has also boosted the share of low-cost savings and time deposits from 45.14 per cent as on March 31, 2006 to 48.7 per cent as on September 30, 2006.
"Our thrust on mobilising deposits from rural and semi-urban areas has helped us reduce our costs of funds, unlike for other banks.
The cost of deposits was 4.35 per cent for the first half ended September 2006, against 4.30 per cent for the same period last year.
Simultaneously, yield of advances has improved from 8.35 per cent to 8.97 per cent," Mr Gupta said. The net interest margin of PNB has risen from 4 per cent during April-September 2005 to 4.16 per cent in the first half of 2006-07.
During the first half of 2006-07, interest income rose by 16 per cent to Rs 5,405 crore (from Rs 4,660 crore during April-September 2005), while non-interest income through commission, exchange and brokerage went up by 33.6 per cent, from Rs 345 crore to Rs 461 crore.
As against this, interest expenses increased by 15.4 per cent, with non-interest income declining by 4 per cent. "We have achieved this through control of overheads," Mr Gupta added.
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