• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Bank aims at recoveries of Rs 1,000-cr NPA this fiscal

Ramesh Sharma

Analysing growth: Dr K.C. Chakrabarty (left), CMD, Punjab National Bank, with Mr K. Raghuraman, Executive Director, at a press conference in the Capital on Wednesday. —

Our Bureau

New Delhi, July 25 Punjab National Bank (PNB) expects to register a 20 per cent increase in net profit this fiscal on the back of a stable interest rate environment and higher business turnover arising from economic growth.

For the first quarter ended June 30, 2007, it has reported 15.7 per cent increase in net profit to Rs 425.07 crore compared with Rs 367.52 crore in the same period last year. This bottomline growth came even as the net interest margin (NIM) saw a decline from 4.07 per cent as on March 30, 2007 to 3.82 per cent as on June 30, 2007.

“In a competitive environment, high NIMs are not sustainable. Do not ridicule a bank just because its NIM is coming down. Even though our NIM has come down, we have increased our net profits by 15.7 per cent. We want to maintain our NIM at 3.75-3.8 per cent levels,” Dr K.C. Chakrabarty, Chairman and Managing Director, told reporters after a board meeting to consider the first quarter results of the bank.

Meanwhile, Dr Chakrabarty admitted that there was lack of management focus on non-performing assets (NPAs) and this had led to rise in net NPA for the period under review. Net NPA as percentage of advances grew from 0.35 per cent as on June 30, 2006 to 0.98 per cent as on July 30, 2007. Net NPA as on June 30, 2007 stood at about Rs 925 crore.

“We have decided that this year, we will focus on consolidation of NPA accounts. We are aiming to make recoveries of about Rs 1,000 crore of NPA this fiscal,” he added.

Dr Chakrabarty attributed the fall in net margins to a combined effect of higher cost of deposits (moved up to 5.46 per cent), falling incomes from investment portfolio and impounding of higher cash reserve ratio. PNB’s yield on advances increased from 9.17 per cent as on March 2007 to 10.23 per cent as on June 30, 2007.

The Executive Director, Mr K. Raghuraman, said that the bank had during the quarter provided for about Rs 200 crore towards retirement benefits of employees following a revision in the accounting standards on retirement benefits by the ICAI. “This year total provisioning towards revised AS-15 would come to about Rs 800 crore,” he said.

Related Stories:
PNB net up 16% in Q3
PNB Q4 net down 17% on higher provisioning

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

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Wet cover blanks central India

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line