Punjab & Sind Bank (PSB) on Saturday reported a 12.75 per cent decline in net profit for the fourth quarter ended March 31, 2011 at Rs 130 crore (Rs 149 crore).

The fourth quarter bottomline performance was weighed down by provisions on gratuity and second pension option for retirees as well as existing employees, according to Mr P. K.Anand, Executive Director, PSB.

Total income for the quarter under review increased by 20.8 per cent to Rs 1,485 crore (Rs 1,229 crore). Net interest income grew 19.82 per cent to Rs 393 crore (Rs 328 crore).

Full-year profit up

For the entire fiscal year 2010-11, PSB's net profit grew marginally at Rs 526.17 crore (Rs 508.80 crore in 2009-10). The net profit for 2010-11 would have been around Rs 800 crore but for the nearly Rs 300 crore provisioning that had to be made towards gratuity and second pension option by retirees and employees, Mr Anand told a press conference here.

The board of directors today recommended a dividend of 20 per cent for 2010-11. PSB has returned to the dividend list after a gap of six years. Meanwhile, the board today gave its nod for the bank to raise up to Rs 600 crore capital through lower Tier-II bonds. “We have got board approval today. When the time is opportune, we will go for raising Rs 600 crore capital during this fiscal,” Mr Anand said.

The Centre is yet to appoint a Chairman and Managing Director for the bank.

PSB, which came out with an initial public offering (IPO) last year, has a Tier –II capital headroom of Rs 1,900 crore.

Total income

PSB's total income in 2010-11 stood at Rs 5,369 crore (Rs 4,345 crore). Net interest income in 2010-11 stood at Rs 1,560 crore (Rs 1,183 crore).

Net interest margin (NIM) for 2010-11 stood at 2.66 per cent, higher than 2.45 per cent in end March 2010.

Mr Anand said that the bank would strive to achieve a NIM of 3 per cent for 2011-12. He also expects net profit of Rs 700 crore for the current fiscal.