Money & Banking

Recording first growth in last four quarters, Punjab National Bank profit up 10% in Q1

Our Bureau New Delhi | Updated on March 12, 2018

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Profit limited by rising bad debt



Beating market expectations, Punjab National Bank reported an over 10 per cent increase in net profit, its first growth in the last four quarters.

Net profit for three months (April-June) stood at ₹1,405 crore against ₹1,275 crore in the corresponding previous fiscal — up 10.2 per cent.

However, the response on the street was subdued as the bank’s share price closed on Friday at ₹924, half a percentage less than Thursday’s closing.

One of the reasons for market disappointment could be the increase in bad debts (non-performing assets). Gross NPAs rose to 5.48 per cent (4.84 per cent in April-June 2013-14) of the total advances, while net NPAs rose to 3.02 per cent compared with 2.98 per cent.

However, the management expects asset quality to improve, as the pipeline of restructured assets has gone down.

The Chairman and Managing Director, KR Kamath, said the net interest margin, a key parameter to judge performance, improved to 3.42 per cent in April-June from 3.2 per cent in January-March.

The bank managed to take its total business to ₹7.92 lakh crore, showing a growth of 12.9 per cent.

Deposits rose to ₹4.45 lakh crore, registering a growth of over 12 per cent. Nearly 40 per cent of these deposits fall in the Current Account-Saving Account (CASA) category, which bears low cost. Bank advances registered a growth of around 13 per cent and reached ₹3.47 lakh crore at the end of June 2014.

Offices abroad

The bank has got permission from Reserve Bank of India for opening a representative office in Mynamar and Bangladesh. Currently, PNB has five such offices in various parts of the world.

It also plans to upgrade its representative office in Australia to a full-fledged branch and is also exploring the possibility of establishing its presence in Maldives, Canada, Mozambique, Brazil and South Africa.

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Published on July 25, 2014
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