Punjab National Bank (PNB) on Thursday reported a 3.44 per cent increase in net profit for the quarter ended June 30, 2011, at Rs 1,105.06 crore as compared to a net profit of Rs 1,068.29 crore in the same quarter last year.

Total income for the period under review increased 36.94 per cent to Rs 9,398.90 crore (Rs 6,863.38 crore). For the first quarter, the bank's net interest margin (NIM) stood at 3.84 per cent.

The financial performance of the bank was satisfactory given the turbulent economic environment in the first quarter of this fiscal, said PNB officials. “I still stick to the NIM guidance of 3.5 per cent that was given at the beginning of this fiscal,” Mr K.R. Kamath, Chairman & Managing Director, PNB, told presspersons here. PNB's financial performance was weighed down by a 32.91 per cent increase in provisions to Rs 1,368.86 crore (Rs 1,029.88 crore). This included provision for depreciation on investments in Government securities amounting to Rs 133.70 crore (Rs 13.62 crore). There was also a substantial increase in provision for standard assets at Rs 159.08 crore (Rs 40 crore).

Also, trading profits for the quarter under review fell sharply to Rs 47.88 crore (Rs 121.11 crore). The other income for the quarter stood at Rs 1,083.67 crore (Rs 891.74 crore).

Aided by a sharp increase in treasury gains, PNB's net profit had registered double-digit growth in the first quarter of 2010-11 as compared to the previous year. “In the first quarter of this fiscal (2011-12), we did not have strong gains in treasury profits. There was also increased provisioning for depreciation in Government securities (marked-to-market). The additional regulatory provisioning for standard assets also impacted our bottomline,” Mr Kamath said.

krsrivats@thehindu.co.in

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