Punjab National Bank?s net profit grew 12.1% to R1,205 crore in July-September from R1,075 crore in the corresponding period last year.
The bank’s net interest margin (NIM) ? a key performance indicator ? dropped 11 basis points to 3.95% in July-September 2011 from 4.06% last year. PNB stocks closed up 3.78% at R1,013.45 at the Bombay Stock Exchange on Tuesday, as the earnings results came above expectations.
PNB chairman and managing director KR Kamath on Tuesday said the bank would target NIM at 3.5%-plus in the future. The bank’s net interest income rose by 16% to R3,453 crore in the second quarter.
Its deposits grew 25%, while advances rose 19.3%. The results were in line with the mid-sized banks, most of whom posted strong quarterly profits. While the bank?s gross non-performing assets (NPA) as a percentage of total advances rose to 2.05% from 1.91% in the same quarter a year ago, its net NPAs rose to 0.84% of total loans from 0.69% in the year-ago period.
Commenting on RBI’s decision to deregulate savings bank rate, PNB said it will take a call on raising the rate after looking at market reaction and is yet to decide on a timeline for that. PNB is country’s second largest state-owned lender after State Bank of India.
Private lenders Kotak Mahindra Bank and Yes Bank have both raised savings bank rates to 6% from 4% on deposits above R1 lakh in these accounts. During the first six months of the current fiscal, the net profit of the bank rose by 7.81% to R2,310.10 crore from R2,142.83 crore in the corresponding half of previous fiscal. The bank has a capital adequacy ratio of 12.23% comprising of Tier-I capital of 8.37%. In July, PNB agreed to buy a 30% stake in the Indian venture of Metlife, the biggest US life insurer, for an undisclosed amount. PNB also entered into a 10-year distribution tie-up with Metlife India.