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Ramesh Sharma

Upbeat on growth: Dr. K.C. Chakrabarty (left), CMD, Punjab National Bank, and Mr J.M. Garg, Executive Director, at a press conference in the Capital on Friday. –

Our Bureau

New Delhi, Oct. 31 Punjab National Bank (PNB) on Friday announced a cut in its benchmark prime lending rate (PLR) by 50 basis points to 13.5 per cent.

The rate cut is effective from November 1, the Chairman and Managing Director, Dr K.C. Chakrabarty, told reporters at a news conference after announcing a 31 per cent jump in second quarter net profit.

The revised rate shall be applicable to existing as well as new borrowers, he said. PNB will also cut its peak deposit rate by 50 basis points to 10 per cent effective from December 1, he added. PNB’s decision to prune rates comes a week after the RBI cut its key lending rate for the first time in more than four years.

As part of festival bonanza, the bank had, earlier this month, reduced rates on housing loans, car loans and education loans by 50 basis points. The temporary rate cut would now become permanent with the announced reduction in the PLR, he said.

Announcing the second quarter results, Dr Chakrabarty said PNB’s net profit grew 31 per cent to Rs 707 crore while total income rose 35 per cent to Rs 5,313.18 crore for the quarter under review. For the six-month ended September 30, PNB reported a 27-per cent jump in net profit at Rs 1,219.50 while total income rose 28 per cent to Rs 9,907.80 crore. The bank’s second quarter interest income rose 33 per cent to Rs 1,712 crore.

Dr Chakrabarty said PNB expects profit growth of 25 per cent during the current fiscal (2008-09) and a loan growth of 20-22 per cent, despite the current turmoil in the financial markets. Total business increased by 25.96 per cent to reach Rs 3,16,747 crore as on September 30. Total deposits increased to Rs 1,86,315 crore while advances improved to Rs 1,30,432 crore.

On the asset quality, Dr Chakrabarty said during the first half year of the current fiscal, the bank had not only stepped up its follow-up and recovery efforts but also contained slippages through effective credit management practices.

PNB shares closed at Rs 430 on the Bombay Stock Exchange, up 4.6 per cent, on Friday.

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

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