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Despite its net profit taking a hit, Punjab National Bank has announced a 100 per cent dividend, meaning every shareholder will get ₹10 for each share he holds.
The bank informed stock exchanges that February 12 is the record date and February 24 is the payment date for the dividend. In other words, shareholders on the bank’s books as on the record date will get dividend.
The Government, being the largest shareholder with over 58 per cent, will get the biggest payout. On Friday, PNB shares closed at ₹548.60, gaining 5.94 per cent over the closing price on Thursday. On the financial front, higher provisioning saw the bank’s net profit decline by over 42 per cent for the three-month period that ended on December 31, 2013.
However, the bank’s management claimed that the worst is over and the current fiscal year will end with better earnings.
The bank recorded a net profit of ₹755 crore during the three-month period ended December 2013 as against ₹1,306 crore in the corresponding period last year. Announcing the results here, its Chairman K.V. Kamath said that the bank is back on the growth path and “it will end the current fiscal at par with the industry.”
Indeed, some positive signs emerged in the third quarter as fresh accretion in bad loans came down to ₹1,500 crore from over ₹3,000 crore during previous quarters. At the same time, the net interest margin went up to 3.57 per cent during the quarter from 3.47 per cent in the corresponding period of 2012-13.
Commenting on interest rates after the RBI’s 25-basis-point hike in the repo rate (the rate at which banks borrow from the Reserve Bank of India for one day or three days) , Kamath said that it would all depend on credit demand and deposits. “If we hold interest rates on deposits, we will do the same for credit,” he said. He did not rule out pressure on interest rates in the ongoing quarter.
Kamath also said that deposits and loans are expected to pick up in the current quarter. In the nine-month period (April-December), deposits grew 9.04 per cent while loans registered growth of 9.69 per cent.
Kamath said he was hoping the current fiscal year would end with around 14 per cent growth in both segments.
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