The Hindu Business Line : PNB profit rises 33% for full year; Q4 net grows 129%

Dr K.C. Chakrabarty, Chairman and Managing Director, Punjab National Bank (right) with Mr K. Raghuraman, Executive Director, at a press conference in the Capital on Thursday.

Our Bureau

New Delhi, May 15 A higher yield on advances, cost control and more recoveries from non-performing loans helped Punjab National Bank (PNB) report a 33 per cent increase in net profit for the year ended March 31 at Rs 2,048.76 crore compared with Rs 1,540.08 crore recorded in the previous financial year.

“We have achieved this performance despite making additional provision of Rs 180 crore relating to income tax for previous years, over and above the income tax liability for the year 2007-08. Additionally, the bank has also made a provision of Rs 100 crore towards wage revision and floating provision of Rs 100 crore towards NPAs,” Dr K.C. Chakrabarty, Chairman and Managing Director of the bank, told reporters here on Thursday.

For 2008-09, Dr Chakrabarty gave a profit guidance of 22 per cent, slightly more than the 20 per cent guidance that was given for 2007-08. “We expect net profit to grow 22 per cent during the current fiscal,” he said in response to a query.

Q4 performance

For the fourth quarter ended March 31, PNB’s net profit grew by about 129 per cent to Rs 543.76 crore (Rs 237.70 crore).

The board of directors of the bank declared a dividend of 130 per cent for 2007-08 (100 per cent for 2006-07).

On advances and deposit growth expected for 2008-09, Dr Chakrabarty said that he expects deposit growth of 18-19 per cent and credit growth of 20-21 per cent.

The credit growth projection for 2008-09 is lower than the 23 per cent estimated for 2007-08. “We have taken a cue from the RBI’s overall projection for advances growth for the industry. Our strategy has been to narrow the gap between deposit and advances growth. It was 20-29 (deposit-advances growth in percentage terms) in 2006-07, 19-23 in 2007-08. We want it to be about 19-21 in 2008-09,” Mr K. Raghuraman, Executive Director, PNB, told Business Line.

On non-performing assets, Dr Chakrabarty said that he expects to make recoveries to the tune of Rs 1,500 crore during 2008-09. In the last quarter of fiscal 2007-08, the bank made recoveries of about Rs 400-Rs 500 crore. As on March 31, the gross NPA stood at Rs 3,319.3 crore and the net NPA stood at Rs 753.8 crore.

He also said that the bank was removing one layer (zonal offices) from the organisational structure and will adopt a three-tier structure as against the earlier four-tier one.

This is expected to enable the bank have a leaner, efficient and cost-effective system.

Related Stories:
PNB to raise Rs 1,500 cr more by March
PNB Q4 net down 17% on higher provisioning

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