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Our Bureau

The bank's insurance broking co collects premium of Rs 80 crore

Kolkata , July 13

More than a year after they were launched, Punjab National Bank's joint ventures with the Principal Financial group have started to look up in terms of business generated. PNB Principal Insurance Advisory Co and Principal PNB Asset Management Co have both recorded an increase in their market share at the end of the last fiscal.

The insurance broking company, which materialised after the surrender of corporate agency arrangement with New India Assurance, has collected a premium of nearly Rs 80 crore. This has come on account of more than 3.8 lakh insurance policies, courtesy partly PNB's own network of branches.

The company, which officially commenced operations in April last year, has earned a brokerage of Rs 9.5 crore, PNB's annual report for 2005-06 has mentioned, adding that a special product for the bank's customers under the PNB-MetLife umbrella has been recently designed.

Distribution network

Distribution of funds offered by Principal PNB Asset Management Co, which was taken up in 2005, is now being done in 22 zones as against 10 zones last year.

The bank, which has established a team of 200 AMFI-certified marketing executives, has earned a fee-based income of Rs 2.5 crore on this front.

Both insurance broking and fund distribution are among the new business initiatives listed by the bank.

Its other activities include home loans on account of PNB Housing Finance Ltd. The latter, the annual report has indicated, has in the past fiscal witnessed significant developments in the real estate sector.

Better strategy

The company, which financed real estate developers as backward linkages to individual home loans, recorded a 30 per cent-plus growth in loan sanctions. Its loan disbursements stood at Rs 393 crore in 2005-06 as compared to Rs 298 crore in the previous year.

Outstanding loans saw a 22 per cent increase, reaching a level of Rs 1,098 crore as on March 31, 2006.

The corresponding figure for the previous year was Rs 898 crore, it is mentioned.

PNB Housing Finance, which earned a total income of Rs 102 crore in 2005-06 as compared Rs 86 crore in the previous fiscal, reduced its net non-performing assets to 2.7 per cent from 6.6 per cent.

Its post-tax profit stood at Rs 17.8 crore (up from Rs 11.2 crore). In comparison, PNB Gilts, the primary dealer promoted by the bank, had a post-tax profit of Rs 29.6 crore in 2005-06, a change from its loss-making status. The situation, according to PNB, is chiefly a result of a "re-orientation of trading strategy and increased focus on fee-based activities".

More Stories on : Financial Services | Public Sector Banks | Punjab National Bank

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PNB's joint ventures pay off

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